Strategic investors hold key to IDICO’s future

IDICO auctioned 55.3 million shares, equivalent to 18.44 percent of its charter capital, at the initial price of 18,000 VND (0.79 USD) per share. A total of 656 investors participated in the auction. Total bidding amounted was 269.3 million shares, five times higher than the total offering.

All the shares were sold at an average of 23,940 VND per share. Foreign investors purchased 41.35 million, equal to 75 percent of total shares.

IDICO has charter capital of 3 trillion VND (132.2 million USD), equivalent to 300 million shares. Under the equitisation plan, the State will retain a 36 percent stake in IDICO while the amount sold to the public amounted to 55.3 million shares, or 18.44 percent of its capital.

Another 135 million shares, or a 45 percent stake, will be offered to strategic investors.

The Government plans to divest entirely from IDICO by the end of 2018.

In the lead-up to the sale, IDICO CEO Nguyen Van Dat said 12 investors had expressed interest in becoming strategic partners. Kinh Bac City Development Share Holding Corporation, Bitexco Group and SSG Corporation have submitted documents and made deposits.

IDICO’s representative said all three companies could become strategic partners if total bidding was lower than a 45 percent stake. If the total bidding is higher than 45 percent, the company will organise an auction with the initial price being set higher than the average winning price in the IPO.

The most important criterion for selecting strategic investors is that investors must have experience in at least one of the three core business lines of IDICO, including construction of technical infrastructure in industrial zones and transport; electricity production and trading; and construction and development of urban and residential areas.

Prospective investors must have total assets of at least 2.5 trillion VND and owner’s equity of at least 1.5 trillion VND. They must have enough financial capacity to buy at least 15 percent of IDICO’s charter capital.

IDICO’s representative said the company’s next development strategy would depend much on its strategic partners.