ADP now favored as potential 20% stakeholder in Vietnam’s ACV

As part of the listing process for the state-owned Airports Corporation of Vietnam (ACV), Vietnam’s principal airport operator, a 20% stake in the company is being offered to a major strategic investor on top of a 5% stake which has been offered to retail investors and which, so far, has raised US$51.6 million from 3.47%. Interest in the 20% stake had been shown by Singaporean Changi Airport Group but, without elaborating, ACV has confirmed that their application had not met strict legal requirements.
As a consequence, Aeroports de Paris (ADP) has taken pole position for the acquisition of this stake. ACV was established in 2012 through the merger of three separate Vietnamese airport corporations located in the north, centre and south of the country. Valued in December 2015 at VND37 trillion (US$1.72 billion), today ACV is Vietnam’s largest airport operator directly managing 8 international and 14 local airports, while also holding interests in nine subsidiaries, affiliate companies and joint ventures.
While Tran Thi Minh Nguyet, a senior official at ACV, has confirmed that “ADP at the moment is the only eligible investor,” he added that: “ACV needs approval from the Ministry of Transport to go ahead with the talks.”
Aeroports de Paris has stated that it had expressed an interest in acquiring a 20% stake in ACV but that they had not as yet made a firm offer.
“Given that the financial, industrial and governance conditions of the sale of the 20% stake in ACV’s capital have not been defined, this is in no way a firm offer on the part of ADP,” a spokesman for ADP said on Wednesday.
ADP would be the second foreign strategic investor in Vietnam’s major SOEs after the sale last week of an 8.8% stake in the country’s flag carrier, Vietnam Airlines, to Japan’s ANA, valued at USD$108 million.
As Vietnam opens up transportation infrastructure to private investment, this will also enable private companies to operate parts of the country’s airports. The anticipation is that this will stimulate competition in the industry that has up until now been monopolized by the state players. This private investment initiative has been piloted with Noi Bai International Airport’s Terminal T1 and Phu Quoc International Airport being opened up.
Earlier last year, Vu Anh Minh, director of the Ministry of Transport’s corporate management department made his thoughts on opening up Vietnamese corporations to international investors: “I believe corporate governance within these state-owned transportation companies will improve, which will, in turn, usher in better performance in terms of operating profit. There will be more promising stocks for investors to pour their money in.”