Business

Petrolimex to sell large stake to JX Nippon Oil & Energy

The Vietnam National Petroleum Group (Petrolimex) is accelerating negotiations with its strategic Japanese investor, JX Nippon Oil and Energy, to sell 15-25 percent of its stakes through a share issue to raise charter capital.


If the share saleis completed, the State holding in the group would be reduced to about75 percent, said Dinh Viet Tien, chief of Petrolimex's Supervisory Boardat its annual shareholders' meeting on May 26.

This move is inline with the Petrolimex' equitis-ation plan approved by the PrimeMinister in May, 2011, to raise its charter capital from 10.7 trillionVND (493.1 million USD) to 12.5 trillion VND (576 million USD).

The Ministry of Industry and Trade represents State ownership in Petrolimex with a 95-percent stake.

Petrolimexsigned a memorandum on strategic co-operation with JX Nippon Oil andEnergy last December. The group expects collaboration with the Japaneseinvestor, who has strong financial capacity with 37 percent of marketshares in Japan, will promote its financial situation and corporategovernance.

At the meeting, Petrolimex' executives also reported on business performance in 2014 and plans for this year.

EndingSeptember, 2014, the group still earned a profit of over 600 billionVND (27.6 million USD) but continuous declines in world oil pricestowards the end of the year trimmed profits. It incurred a total loss of9 billion VND (415,000 USD) after tax by the end of last year.

Dueto failure in the profit performance, Petrolimex decided not to paydividends of 8-10 percent as earlier projected. However, performance ofother business lines, which account for 55 percent of the group's totalsales including lubricants, insurance, gas, jet fuel and transportation,achieved positive results and offset oil price declines.

In2015, world oil prices are volatile and unpredictable, but the nationaleconomy is forecast to strengthen with the GDP growth forecast of 6.5percent and inflation rate of about 5 percent.

Petrolimex hastargeted sales of oil and gas of 10.08 trillion VND (464.5 million USD)in 2015 (including in both domestic and foreign markets), up 2.5 percentover 2014. However, it trimmed the consolidated revenue target by 24.5percent to 154 trillion VND (7.1 billion USD).

Its pre-tax profitgoal is set at 2.45 trillion VND (112.9 million USD), up to 760 percentover 2014. The dividend rate is still kept at 8 percent in 2015.

This year, the group will also build divestment plans from its insurance arm PJICO Insurance Corp, PGBank and PLand as directed.

PGBankis projected to merge into Vietinbank. The two banks have completed themerger documents and the deal is expected to complete in the end ofthis year.-VNA
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