Vietnam’s biggest insurance firm Bao Viet raised VND14 billion (US$8.8 million) from a public auction of shares left over from its initial public offering last May after bidders defaulted.
However, of the 15.6 million shares remaining from the previous round, it found bidders for just 1.9 million. The amount raised was thus far below the $72 million the company hoped to raise.
The second round saw an average price of VND74,019 against VND73,910 earlier.
Foreign investors bought the lion’s share at the latest auction, snapping up 1.8 million shares.
The insurer set to raise $112 million from its IPO, having set a starting price for bids at VND30,500 each.
According to industry insiders, the giant insurer might now offer the almost 14 million unsold shares to strategic foreign partners.
The company has a registered capital of VND6.8 trillion ($422 million).
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 following its World Trade Organization membership in January.
Vietnam's insurance sector has grown rapidly in recent years, reflecting the country's robust growth of more than 8 percent 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.
The insurer forecast its 2007 net profit would jump almost two-thirds to VND524 billion ($32.5 million) as it expanded into banking and real estate.
Bao Viet is the leader in Vietnam's non-life insurance market with an almost 35 percent share and ranks second in life insurance with 36.5 percent, behind Prudential's 41.6 percent share.
It set to list in Vietnam by 2009 and is considering listing on an unspecified market overseas.
Source: Thanh Nien
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