Binh Son Refining and Petrochemical’s IPO obtains over US$245 million

By Minh An - Jan 19, 2018 | 06:55 AM GMT+7

TheLEADERDomestic and foreign investors have paid an average price of VND23,000 (US$1.01) per share, 56 per cent higher than the initial price of VND14,600 (US$0.64) offered in the auction.

Binh Son Refining and Petrochemical’s IPO obtains over US$245 million
A corner of Dung Quat Refinery. Photo: Picture: Cam Van Kinh

According to Ho Chi Minh City Stock Exchange (HOSE), over 241 million shares of Binh Son Refining and Petrochemical Co., Ltd (BSR) were successfully auctioned on January 17, 2018.

There are 561 investors including 62 organizations spending a total of VND5,566 billion (US$245 million) to acquire an 8 per cent stake in BSR which is responsible for receiving, managing and operating Dung Quat Oil Refinery Plant.

Investors registered to purchase 650 million shares, 2.7 times higher than the number of shares BSR offered for sale.

As planned, BSR has a charter capital of more than VND31 trillion (US$1.36 billion) of which Vietnam Oil and Gas Group (PetroVietnam) will hold a 43 per cent stake and a 49 per cent stake is offered to strategic investors.

Auction results of BSR's IPO

According to BSR’s regulations, strategic investors must have minimum VND10 trillion (US$441 million) in equity and have been profitable in two recent years without accumulated losses. These investors must also commit not to transferring BRS’s shares within five years.

Dung Quat attracts huge interest from foreign oil and gas corporations such as WorldPetro, MacronPetro Petroleum, Repsol, Rosneft, etc.

Dung Quat is the only refinery which is currently operating in Vietnam with the designed capacity of 6.5 million tons of crude oil per year and approved investment capital of US$3 billion. In recent years, the plant has supplied about 30 per cent of the country's gasoline demand.

The plant’s gasoline and diesel products are distributed by Petrolimex (accounting for 41 per cent of revenue), PV Oil (25 per cent of revenue), Thanh Le and Saigon Petro.

After the upgrading and expansion of the plant are completed (expected in 2022), the plant's production capacity will increase from the current 6.5 million tons to 8.5 million tons of crude oil per year. Besides, the quality of output product will be improved from the current grades 2 and 3 to grade 5.

Dung Quat together with Nghi Son Refinery, which will be in operation in early 2018 (with capacity of 8.4 million tons), will provide 80 per cent of the domestic petroleum demand.

Recently, Head of Planning and Economic Affairs, BSR said that in 2017, BSR exceeded the plan with output of 6.1 million tons and consumption of nearly 6.1 million tons. Revenue and after-tax profit are estimated at VND80.5 trillion (US$3.5 billion) and VND8.03 trillion (US$354.3 million), respectively. An amount of VND10,392 million (US$458.3 million) has paid to the State budget.