Saigon Tourist will auction a 1.14 per cent stake in Jetstar Pacific Airlines on April 26. (Photo: airbus.com)

Hanoi (VNA) - State-owned tour developer Saigon Tourist will auction its entire holding of almost 363,800 shares of Jetstar Pacific Airlines Joint Stock Aviation Company this month, an amount equivalent to 1.14 percent of the budget airline’s capital.

Jetstar Pacific’s accumulated losses have mounted to 3.7 trillion VND (160 million USD) as of September 30, 2016, according to the figures released by Vietinbank Securities Co., who is the deal advisory.

The starting price is set at 15,000 VND (0.66 USD) a share, just a 13.6 percent of the face value of 110,000 VND for a Jetstar Pacific’s share.

At this price, Saigon Tourist will book a loss of nearly 35 billion VND for this investment.

All existing shareholders of Jetstar airlines are eligible to participate in the auction, scheduled on April 26.
Saigon Tourist’s divestment is forecast to be difficult, especially following Jetstar Pacific’s long streak of losses. Founded in 1991, Jetstar Pacific is Vietnam’s first budget airline, but its performance has been left behind by its rival Vietjet Air, which started operation in 2011.

According to Vietinbank Securities Co’s report, Jetstar Pacific earned total revenues of nearly 4 trillion VND in the first nine months of 2016, up 550 billion VND over the same period of 2015. However, it posted a loss of 346 billion VND during the period, a bad performance compared to a profit of 80 billion VND in first nine-months of 2015.

It accumulated losses of nearly 3.7 trillion VND by the end of September last year, of which short-term financial liabilities have swollen to 1.8 trillion VND.

The airline’s equity capital shrank from 3.5 trillion VND to just 413 billion VND.

National flag carrier Vietnam Airlines is its largest shareholder with a 68.85 per cent while Singapore-based Qantas Asia Investment Company Pte Ltd owns 30 percent.

Other two minor stakeholders include Saigon Tourist with a 1.14 percent and Luong Hoai Nam, Jetstar’s former general director, with a 0.01 percent stake.

In April last year, Vietnam Airlines and Qantas unveiled plans of pouring additional 139 million USD to double the size of Jetstar Pacific’s fleet to 30 aircraft over the next four years.

Saigon Tourist reported a plan to offload Jetstar Pacific shares in 2015 but did not make it due to transfer restrictions.-VNA