Budget carrier Vietjet sells over 24% stake to 26 foreign investors

Deal StreetAsia
Vietjet is selling more than 24 per cent stake to 26 foreign investors after, the budget airline increased its charter capital from VND2 trillion to VND3 trillion, according to a report in the local investment ministry’s publication Bao Dau tu. Of the 73 million shares the budget airline is offloading, nearly 6.6 million or over 2.6 per cent of its charter capital, were transferred to three investment funds, Wareham Group Limited, Dragon Capital and DC Developing Markets Strategies. This transaction was reportedly closed in late December 2016. The undisclosed transaction – of this 2.6% stake – was said to be valued up to VND788 billion ($34.7 million), the publication added. Meanwhile, the low-cost carrier has also got the approval from the transportation ministry to sell another 22.17 per cent stake to 23 foreign investors, the Bao Dau tu cited its source. An email inquiry sent to Vietjet has not elicited a response at the time of publishing this article. Vietjet has been raising its charter capital over the past six months. The company is exploring a domestic IPO and earlier said its listing process had attracted interest from 30 potential buyers.

Accordingly, the private carrier, which is known by its bikini promotion campaign, had last month raised funds by offering a 15 per cent stake. It added that 30 international institutions had subscribed to the shares, including Singapore’s GIC, Morgan Stanley, Mirae Asset, Dragon Capital and VinaCapital. The shares were oversubscribed by 1.8 times and worth $265 million in bidding while the transaction price was not disclosed. But sources said, investors purchased the shares at VND86,500 apiece, which translates into a $1.2 billion valuation for Vietjet. Meanwhile, Reuters had earlier reported the unit price at VND84,400 helping Vietjet raise some $170 million. Vietjet’s IPO is slated for the fourth week of next month, which will see the shares traded at the beginning price of VND88,800, according to sources in VietDragon Securities Co. Initially planned as an overseas listing, the IPO will be hosted on the Ho Chi Minh City Stock Exchange, home to 400 listed stocks, in February 2017.

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