VinaCapital snaps up stake in Vietnam airports

Following its IPO last month, the Airports Corporation of Vietnam is in discussions with Aéroports de Paris over a "strategic partnership".

VinaCapital, an Ho Chi Minh City-based asset manager, has invested in Airports Corporation of Vietnam (ACV) through its Vietnam Opportunity Fund (VOF) after the government decided to offload a stake in the asset.

Launched last month, the offering was 1.3 times oversubscribed. ACV’s shares were traded by 152 investors, including 16 institutional investors, according to Nikkei. 

“The key success factor with this privatisation – or ‘equitisation’ as it is referred to in Vietnam – was that it attracted strong demand from both domestic and international investors, a reflection of the quality of the company and the fair valuation of the offer,” the firm said in its monthly update. 

VinaCapital declined to disclose the size of its investment. 

“Looking ahead, we would expect the government to quicken the pace of equitisation after a disappointing past two years where few investible opportunities were available. The fund stands ready to evaluate and invest into these equitisations as they arise,” the firm added. 

With 22 airports under management, ACV is seeking permission from the Ministry of Transport to start discussions with French group Aéroports de Paris, the only one out of three bidders meeting the Ministry’s requirements for the role of international strategic partner, according to local press reports. 

The other two bidders included Singapore’s Changi Airport International and the Bank for Investment and Development of Vietnam. 

The strategic investor is expected to hold a 20 percent in ACV, with the Vietnamese government retaining a 75 percent stake. The float, which involved 3.47 percent of the shares, brought around $50 million in proceeds to the state. 

These will be used to fund projects, including Long Thanh international, a new international airport for Ho Chi Minh City. The first phase of the project is expected to complete by 2025. 

VOF is a closed-end fund trading on the AIM Market of the London Stock Exchange. As at 31 December 2015, its net asset value was $694.4 million. Its portfolio includes both listed equities and OTC-traded stocks. 

Its performance in December remained flat as the continued volatility in oil prices had a direct impact on PetroVietnam Drilling and PetroVietnam Services, its oil and gas holdings. 

Apart from VOF, VinaCapital manages two closed-end funds with infrastructure exposures: the $100 million Vietnam Infrastructure (VNI) and the $51.7 million Forum One – VCG Partners Vietnam Fund (VVF). The fund manager now oversees a portfolio of $1.5 billion.