Vietnam's biggest insurer, Bao Viet, raised $272 million through the sale of nearly 9% of its shares in an initial public offering, the Hanoi stock market announced on Monday.
Bao Viet's IPO, followed by those of four state-run banks due later this year, is seen as a test of Vietnam's commitment to open its markets as part of its membership of the World Trade Organisation, which it joined in January.
Vietnam's insurance sector has grown rapidly in recent years, reflecting the country's robust growth of more than 8% in 2005 and 2006. Growth potential in a country of 84 million people is significant as Vietnam spent $10.10 per head on insurance in 2005, compared to $46.3 in China, industry reports show.
Hanoi-based Bao Viet sold all 59.44 million shares on offer, or a stake of 8.74%, at an average price of 73,910 dong in the May 31 auction, the over-the-counter market said in a statement, raising 4.39 trillion dong.
That average price valued the company, formally known as Vietnam Insurance Corp., at $2.75 billion.
The IPO result was delayed as market staff had to work through the weekend to process the offering after investors sought to buy more than 388 million Bao Viet shares, officials said.
Bao Viet previously hoped to raise $112.5 million from its IPO, having set a starting price for bids at 30,500 dong each.
Bao Viet claims market leadership in Vietnam's non-life insurance market, with almost 35%, and ranks second in life insurance, with 36.5%, behind Prudential's 41.6% share.
Bao Viet Chairman Le Quang Binh said last month the post-IPO shares would be registered with the stock market, while a domestic listing would follow within two years.
Binh said the company would also consider listing overseas.
After the IPO, Bao Viet will offer 18% to foreign strategic investors, sell 7.22% to domestic strategic investors, and earmark 0.7% for staff. The state would retain 65.34% ownership in the firm.
Source: Reuters
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