Bao Viet to Make Initial Public Offering

 

Ms. Nguyen Thi Phuc Lam, General Director of Bao Viet, said: Under the plan approved by the Ministry of Finance, Bao Viet will soon be transformed into a joint stock firm, Bao Viet Holdings. Bao Viet Holdings will have chartered capital of VND6,800 billion (US$375 million), or 680 million shares with nominal value of VND10,000. The State will hold a 65.34 per cent stake, Bao Viet employees will keep 0.7 per cent and strategic partners will hold 7.22 per cent at preferential prices. Foreign strategic investors will be allowed to keep a total of 18 per cent of chartered capital. The starting price at auction is 30,500 a share.

 

Ms. Lam said Bao Viet will sell 59.44 million shares to the public, including 13.6 million shares for foreign investors. Legal entities can each register to buy a maximum of 3.4 million shares, while individual investors can buy a maximum of 340,000 shares. Investors can register for the auction and pay deposits from May 11 to May 24. The auction, to be held May 31, will gather 13 securities companies, the biggest number of securities companies so far.

 

Bao Viet has declined to reveal the names of strategic investors participating in the auction. “There are many interested institutions, including big groups in the fields of insurance and banking. At present, Bao Viet is still receiving auction registrations from potential strategic investors. However, everything will depend on the May 31 auction. Under new regulations, strategic shareholders cannot buy shares at preferential prices,” Mr Le Quang Binh, Chairman of Bao Viet, said.

 

According to Mr Binh, after equitisation Bao Viet will list shares at Hanoi Securities Trading Centre. “However, the detailed plan on listing shares will be decided, later during the shareholders’ meeting,” Binh said. Under the corporate business plan, Bao Viet will set up new affiliate companies, including Bao Viet Bank (in 2007), Bao Viet Health Insurance (2008), Bao Viet Real Estate (2008) and Bao Viet Finance Leasing (2010). Bao Viet expects revenues to increase 15 per cent annually, to reach VND12,910 billion (US$ 807 million) in 2010, doubling from 2005.

 

Bao Viet is the largest insurer in Vietnam in terms of premiums and market shares. In 2001-2006, premiums grew 23.7 per cent a year, while equity increased from VND910 billion in 2001 to VND1,895 billion in 2006 (a 108 per cent rise), and pre-tax profit increased from VND119 billion in 2001 to VND431 billion in 2006 (an increase of 262 per cent).