A small Vietnamese power firm will auction more than 4 million shares to the public this month to raise at least $3.8 million, the over-the-counter Hanoi stock market said on Thursday.
Ninh Binh Thermal Power Company, a subsidiary of state utility Vietnam Electricity (EVN), would auction 4,088,095 shares, or 31.78% of the company, in an initial public offering on April 18, the market said in a statement.
The company, which operates a coal-fired power plant in Ninh Binh province, 90 km (55 miles) south of Hanoi, set a starting price for bids at 15,000 dong ($0.93) per share, which suggested the firm would be valued at nearly $12 million.
Ninh Binh, EVN's fourth subsidiary to launch an IPO this year, has yet to announce a listing date.
EVN would retain a 51% stake in the firm and employees would be able to buy the remaining 17.22%, the statement said.
Last year, the Ninh Binh plant produced 795 million kilowatt hours (kWh) of electricity, 13.6% above its average annual production but only 1.3% of Vietnam's total.
The emergence of more private businesses and a rise in disposable incomes have pushed electricity demand growth to around 15% in recent years, driving the communist government to plan 60 additional power plants by 2020.
The Ninh Binh power company said it would spend up to $17 million to upgrade its current plant and also planned a $402 million investment in a second plant to be operational by 2010.
Last month, Prime Minister Nguyen Tan Dung said the state would keep full ownership or the majority of shares in power plants with a capacity of 100 megawatts or more.
This week, the government approved the partial privatisation of 24 EVN subsidiaries in 2007 and five next year.
Investors have shown increasing interest in shares of Vietnamese energy sector companies as the economy is expected to expand more than 8% this year.
Source: Reuters
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