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PetroVietnam Gas to Cut Initial Offering by 50% to Avoid Flooding Market

By Bloomberg News - Sep 14, 2010

PetroVietnam Gas Corp., a unit of Vietnam Oil & Gas Group, plans to reduce the size of its initial public offering by about 50 percent to avoid flooding the stock market with too many shares.

The fuel supplier expects to raise at least 2.9 trillion dong ($149 million) selling 95 million shares, or a 5 percent stake, General Director Do Khang Ninh said in a telephone interview from Ho Chi Minh City today. Ninh had said Sept. 6 that PetroVietnam Gas would raise 5.87 trillion dong by selling a 10 percent stake.

“We revised the share sale plan because we were afraid a 10 percent stake would be too much for the market,” Ninh said today. The sale would take place sometime in October and the minimum bid remains unchanged at 31,000 dong a share, he said.

Ninh declined to give a timeframe for when the company may sell another 5 percent stake to the public.

The benchmark VN Index gained 0.4 percent to 449.01 at the 11 a.m. close. The gauge has declined 9.3 percent so far this year, according to data compiled by Bloomberg.

PetroVietnam Gas, which supplies fuel to produce 40 percent of Vietnam’s electrical output and 30 percent of the nation’s fertilizer, will probably be listed on the Ho Chi Minh City Stock Exchange, the country’s main bourse, a year after the share sale, according to a statement on the company’s website.