The national flag carrier Vietnam Airlines is planning to make its initial public offering (IPO) by the end next year, under a restructuring plan submitted to the Ministry of Transport earlier this week.

Under the plan for partial equitisation, about 70 to 80 percent of shares in the airline will continue to be held by the State.

Vietnam Airlines chairman Pham Viet Thanh told the newspaper Dau Tu (Vietnam Investment Review) that his corporation expects to raise at least 200 million USD from the IPO, a target that will be fulfilled only if some of the shares are acquired by foreign investors.

In 2015 and 2017, the airline expects to issue additional shares worth 450 million USD to raise capital to buy nine Airbus A350 and four Boeing B787-9 aircraft for its fleet.

During the re-organisation, the airline will hold onto 100 percent of its Vietnam Airlines Engineering Ltd and Vietnam Air Petrol Ltd subsidiaries under a limited liability company model. The airline will also maintain its major shareholder status in nine service companies while keeping its existing investments in 11 suppliers.

It will otherwise divest from non-core business such as insurance, securities, banking, and real estate by 2015 with an expected capital, retrieving capital totalling an estimated 530 billion VND (25.3 million USD).

Under the final restructuring, Vietnam Airlines will consist of the parent company, 15 affiliates and 12 associated companies, compared to the current 18 and 14, respectively.

The carrier expects the restructuring to help improve its business performance during the 2012-20 period, with earnings to total 43.5 billion USD and profits to reach 1.08 billion USD during the next eight years. The airline will also target to become the third largest airline in Southeast Asia by the end of the decade.

Vietnam Airlines had been included in a Government list of State-owned enterprises to go public during 2007-10, but the plan failed to take off due to the financial crisis and the declining stock market.

At a meeting earlier this week, Minister of Transport Dinh La Thang said that the airline now needs to speed up its restructuring with the aim of becoming a stronger national carrier. The airline will complete the final draft of its restructuring plan for submission to the Ministry of Transport by the end of this month, with Government approval expected in May, Thang added.-VNA