The Viet Nam National Petroleum Group (Petrolimex) is proceeding to sell a maximum of 60 million treasury stocks on the Ho Chi Minh Stock Exchange, the second sale of its kind since its debut in April 2017.
Treasury stocks, or reacquired stocks, are stocks which are bought back by the issuing company from shareholders, intended for resale to the public.
The sales will depend on the conditions and developments on the stock market but will be conducted as soon as possible in the last quarter of this year after getting the nod from the Ministry of Industry and Trade (MoIT) and the State Securities Commission.
The MoIT, which represents the State capital in the company, is the biggest stakeholder of Petrolimex with an ownership of 75.87 per cent as of December 31, 2017. JX Nippon Oil & Energy Vietnam Consulting and Holdings Co Ltd holds an 8 per cent stake.
In May last year, Petrolimex sold 20 million treasury stocks, reaping over VND1 trillion (US$44 million at that time) at a transaction value five times higher than par value at an average price of VND50,553 ($2.22) per share.
Petrolimex owned more than 135 million treasury stocks after the sale.
These stocks were reacquired in September 2016 at only VND10,600 per share.
Petrolimex’s shares (PLX) have risen in the past two months to VND71,000 per share on September 12, a 31 per cent premium on July’s bottom of VND54,000 per share.
PLX dropped to below VND70,000 on September 13 after five consecutive rising sessions. Since the beginning of this year, it has lost about 7 per cent in value.
Petrolimex is Viet Nam’s largest importer and distributor of petroleum. In the first half of this year, it posted after-tax profit of nearly VND2.3 trillion (roughly $99 million), up 14 per cent against the same period last year.
According to Viet Capital Securities Co, Viet Nam’s oil refining and distribution is a young and high-potential industry given the country’s thirst for refined products.
It is estimated Viet Nam’s petroleum consumption CARG (compound annual growth rate) will be 5 per cent over the next five years, which is much higher than the global growth rate of 1.3 per cent per year.
Consumption of gasoline and diesel fuel is estimated to grow at a CAGR of 3.5 per cent and 4.7 per cent, respectively, while steady development of the local aviation industry is expected to help demand for aviation fuel increase by 8.5 per cent per year.