Airlines’ shares are very attractive to banks, said the English language news portal VietNamNet Bridge reported.
Thenational flag air carrier Vietnam Airlines on November 14 sold 49million shares in its IPO (initial public offering), reaping 1.093trillion VND, or 51.3 million USD. The IPO was, as described by VietnamAirlines, successful with the result meeting its expectations.
Themajority of shares were sold to Techcombank and Vietcombank whichbought the shares to hold 1.82 percent and 1.6 percent of VietnamAirlines’ chartered capital, respectively.
As such, Techcombankand Vietcombank, following HD Bank, have poured money into air carriers.HD Bank now holds 10 percent of the shares of Vietjet Air.
Anformer finance director of an airline noted that airlines’ shares areattractive not because of the airlines’ profits, but because of thelong-term benefits banks expect.
“The airlines’ profit is low ifcompared with the revenue,” the former finance director was quoted assaying. “However, the revenue from transport services, air ticket salesand salaries is really a big cake for banks.”
It is estimatedthat Vietnam Airlines earns 50 trillion VND every year from transportservices. Besides, banks can also expect capital from the airline’sticket sales to 1.2 million passengers a month, and from money paid to10,000 workers of Vietnam Airlines.
“Banks expect to earn moneyfrom providing services to Vietnam Airlines, rather than from VietnamAirlines’ dividends,” he noted.
Dinh The Hien, a renownedeconomist, noted that airlines’ shares do not attract small andshort-term investors, who hope to make profit when share pricesincrease.
Vietnam Airlines’ shares attract big institutional investors who seek safe long term investments.
Whenbeing asked to comment on why foreign institutional investors did notbuy Vietnam Airlines’ shares, a finance expert said the air carrier onlyoffered to sell 3.5 percent of chartered capital, a modest proportion,and therefore, is unattractive to them.
However, Techcombank andVietcombank have reasons to invest in Vietnam Airlines. Both banks havebeen providing banking services to Vietnam Airlines for many years, andhave long term relations with the air carrier.
Pham Quang Dung,General Director of Vietcombank, was cited as saying that the bank hasbeen lending to Vietnam Airlines, providing capital management, anddomestic and overseas payment and card services.
Meanwhile,according to Techcombank’s Deputy General Director Nguyen Canh Vinh,Techcombank joined many projects to provide syndicated loans to VietnamAirlines to fund the air carrier’s purchase of aircraft.
Afterthe successful IPO, Vietnam Airlines plans to sell another 282 millionshares, or 20 percent of its chartered capital to strategic investors.
BSC,the consultant for Vietnam Airlines’ IPO, said the air carrier wants toseek an investor in the aviation sector and one or two financeinvestors, who can help it arrange capital for the plans to expand itsfleet.-VNA
Thenational flag air carrier Vietnam Airlines on November 14 sold 49million shares in its IPO (initial public offering), reaping 1.093trillion VND, or 51.3 million USD. The IPO was, as described by VietnamAirlines, successful with the result meeting its expectations.
Themajority of shares were sold to Techcombank and Vietcombank whichbought the shares to hold 1.82 percent and 1.6 percent of VietnamAirlines’ chartered capital, respectively.
As such, Techcombankand Vietcombank, following HD Bank, have poured money into air carriers.HD Bank now holds 10 percent of the shares of Vietjet Air.
Anformer finance director of an airline noted that airlines’ shares areattractive not because of the airlines’ profits, but because of thelong-term benefits banks expect.
“The airlines’ profit is low ifcompared with the revenue,” the former finance director was quoted assaying. “However, the revenue from transport services, air ticket salesand salaries is really a big cake for banks.”
It is estimatedthat Vietnam Airlines earns 50 trillion VND every year from transportservices. Besides, banks can also expect capital from the airline’sticket sales to 1.2 million passengers a month, and from money paid to10,000 workers of Vietnam Airlines.
“Banks expect to earn moneyfrom providing services to Vietnam Airlines, rather than from VietnamAirlines’ dividends,” he noted.
Dinh The Hien, a renownedeconomist, noted that airlines’ shares do not attract small andshort-term investors, who hope to make profit when share pricesincrease.
Vietnam Airlines’ shares attract big institutional investors who seek safe long term investments.
Whenbeing asked to comment on why foreign institutional investors did notbuy Vietnam Airlines’ shares, a finance expert said the air carrier onlyoffered to sell 3.5 percent of chartered capital, a modest proportion,and therefore, is unattractive to them.
However, Techcombank andVietcombank have reasons to invest in Vietnam Airlines. Both banks havebeen providing banking services to Vietnam Airlines for many years, andhave long term relations with the air carrier.
Pham Quang Dung,General Director of Vietcombank, was cited as saying that the bank hasbeen lending to Vietnam Airlines, providing capital management, anddomestic and overseas payment and card services.
Meanwhile,according to Techcombank’s Deputy General Director Nguyen Canh Vinh,Techcombank joined many projects to provide syndicated loans to VietnamAirlines to fund the air carrier’s purchase of aircraft.
Afterthe successful IPO, Vietnam Airlines plans to sell another 282 millionshares, or 20 percent of its chartered capital to strategic investors.
BSC,the consultant for Vietnam Airlines’ IPO, said the air carrier wants toseek an investor in the aviation sector and one or two financeinvestors, who can help it arrange capital for the plans to expand itsfleet.-VNA
