Four foreign investors eye buying in to Vietnam’s GENCO 3
Four foreign investors from India, Thailand, the Republic of Korea and the Middle East registered to buy 36 percent of the charter capital at the Power Generation Corporation 3 (GENCO 3) to become its strategic investors.
Dinh Quang Tri, deputy general director of the Electricity of Vietnam (EVN) announced the development at the roadshow to introduce investment opportunities in GENCO 3 held in Hanoi on January 25. “All of the foreign investors are big firms,” Tri said.
For example, the Indian investor has electricity capacity of more than 10,000 MW and has invested in coal mines in Indonesia and Australia.
The Thai investor has experience in developing gas turbines and big cash flow, while the investor from the Middle East specialises in buying power plants around the world as well as providing gas resources with more competitive prices.
“The four investors all have great potential. The competition to choose the strategic investor on March 15 will be as attractive as the final match of U23 Vietnam and U23 Uzbekistan,” he added.
Tri said following the equitisation plan approved by the Government, 36 percent of GENCO 3’s charter capital, or 749.1 million shares, would be sold to strategic investors. GENCO 3’s charter capital is 20.8 trillion VND, 51 percent of which will be owned by EVN. The corporation has a value of around 52 trillion VND (2.3 billion USD).
EVN would divest its capital at GENCO 3 to less than controlling level after 2019 if EVN and the corporation were successful in restructuring its debts and negotiating with lenders.
“The share selling would help GENCO 3 gain capital for investment in new power projects as well as paying loans from foreign countries which have been guaranteed by the Government,” he added.
Dinh Quoc Lam, GENCO 3’s general director, said it would put more than 267 million shares, accounting for 12.8 percent of its charter capital, up for sale in its initial public offering (IPO) in February 2018. Some 0.16 percent or 3.4 million shares would be sold to labourers.
Lam said the shares will be listed on the HCM Stock Exchange (HoSE) with the initial auction price of 24,600 VND (1.08 USD) per share.
GENCO 3 is one of the three power generation corporations under EVN’s management. It has capacity of 6,304 MW, accounting for 16 percent of the country’s total electricity system. Last year, its revenue was estimated at some 34.6 trillion VND and profit from power production was 1.27 trillion VND, surpassing 19 percent of the set targets.
GENCO 3 planned to start construction of two solar power projects while implementing investment procedures of the Long Son Electricity Centre project using liquefied natural gas in the southern Ba Ria – Vung Tau province in 2018.
The joint venture of VIET Capital Company and EVN Finance will provide consultancy for GENCO 3 privatisation.
According to Barry Weisblatt, director of VIET Capital, GENCO 3 has key power resources in Phu My, Vinh Tan 2, Mong Duong 1 and Buon Kuop plants, giving it an advantage when entering into the electricity market.
In addition, it has high quality human resources, including employees who have worked at firms such as GE, Alstom, MHI and Siemens. They will help GENCO 3 quickly adapt to changes in the market, creating a firm foundation in the future.
GENCO 3 has been the strongest unit in EVN’s power generation corporations. It has nine power plants including four gas-fired power plants, three hydropower plants and two coal-fired power plants with total capacity of 5.5 GW.
The corporation also has two subsidiaries of Ba Ria and Ninh Bình Thermo-power companies. It also owns 30 percent of shares at Vinh Son – Song Hinh, Thac Ba và Se San 3A Hydropower plants.