Key projects
Tue, 22/12/2015, 02:36 GMT+7
Accelerate progress of equitization for BSR
On 3rd December 2015 morning, in Hanoi, the Steering Committee for equitization of Binh Son Refining and Petrochemical Company Ltd., (BSR) held periodical meeting to accelerate progress of equitization and propose a number of solutions to the Government and relevant ministries.

The meeting was chaired by Mr. Phan Dinh Duc - member of the Board of Directors of Petrovietnam and attended by representatives from the Government Office, Ministry of Industry and Trade, Vice Presidents and representatives from some divisions of Petrovietnam and BSR’s leader.


day nhanh tien do co phan hoa cong ty bsr

Mr. Phan Dinh Duc – member of the BOD of Petrovietnam, head of equitization committee of BSR made speech at the meeting


Mr. Nguyen Hoai Giang - Chairman of the Board of Directors of BSR reported the progress of equitization with two main contents: authority to announce the corporate value and approval of equitization plan for BSR. The Company also proposed a partnership with Viet Capital Securities Joint Stock Company (VCSC) and Southeast Appraisal and Consulting Corporation (SACC). These units are permitted by the Ministry of Finance to provide the corporate valuation service for equitization in 2015. The units are experienced in equitization consultancy and used to provide consultancy service for equitizing such petroleum companies as PV GAS, PVCFC, PV OIL...


One of the key contents in planning equitization for enterprises is to include the business plan in the equitization plan. The business prospects following equitization provide important information for investors to decide investment in BSR. Normally, it is planned that ratio on equity (ROE) in 3 - 5 years following equitization should be at least 10% to attract investors.


With regard to BSR - a big enterprise operating in the specific area, it is necessary to make effective business plan for the next 5 years (2017-2021) as important, necessary and reliable information to attract investors to buy IPO shares of BSR.


It is expected that BSR will complete the equitization in 2017, but BSR needs as much support as possible from the Government on a number of financial mechanisms to ensure ROE levels at or above 10% in 3 years following 2018.


Besides, the import tariff for petroleum products from the countries under the ASEAN roadmap commitments has been much lower than the tariff applied to BSR’s product price.  Thus, in order to develop BSR sustainably and facilitate its equitization roadmap, the Government should have a mechanism for reduced import tariff applicable to the products of Dung Quat Oil Refinery.

Speaking at the meeting, PVN Vice President Ninh Van Quynh stressed: By 31st December 2015, BSR should take detailed accounting measures as a basis for valuation. “The success of equitization will depend on the business plan in 3 years following equitization. If PVN and BSR do not propose policies that affect production and business activities, the equitization roadmap will encounter numerous difficulties. Therefore, PVN and BSR should jointly recommend the most accurate and active policy”.


PVN Vice President Le Manh Hung also reveals that BSR must complete equitization by the end of 2017 under the roadmap. However, according to the actual experience at Ca Mau Fertilizer Plant, the equitization has been completed one year ahead, so BSR should try to complete earlier. BSR is a big company under PVN. In the meetings with foreign investors, the Group has recorded positive signals of investors from PTT Group (Thailand), the Groups of Iran... that wants to buy BSR’s shares.


Mr. Pham Tuan Anh, Deputy Director of Business Innovation Department from the Government Office adds that as of early December 2015, the SOEs have achieved 95% of equitization plan in 2015. It shows that the Government, ministries and businesses have done their good job. The market is also improved when investors see the SOEs as reliable address to buy shares. Mr. Pham Tuan Anh thinks the equitization relates to many problems, so PVN and BSR should prepare a list of tasks to send to the relevant agencies for handling properly, synchronously with clear and detailed plan.


Delivering conclusion speech at the meeting, Mr. Phan Dinh Duc, member of the Board of Directors of PVN emphasized the tasks for the Group and BSR: the Group should report to the Government on BSR’s ability to buy shares of some foreign partners; maintain two equitization plans in parallel, i.e. to find strategic partner and sell shares to the public; BSR’s equitisation roadmap should be implemented as soon as possible; establish criteria for equitization, shareholders and communication roadmap; propose to the Government the policies for the period of 2016 - 2018 and after 2020.