The Ministry of Industry and Trade (MoIT) will submit its plan to offload part of the State’s capital in the Saigon Beer-Alcohol-Beverage Corporation (Sabeco) to Deputy Prime Minister Vuong Dinh Hue by October 20.
According to the Steering Committee for Business Renovation and Development, the ministry that represents the Government to administrate the State’s investment in Sabeco will sell 53.59 percent stake in the brewer’s charter capital.
If completed, the deal will reduce the State’s ownership in the beer producer to 36 percent from the current 89.6 percent. The new percentage of ownership will assure the Government’s veto right when the company makes decisions.
It is not known how MoIT will sell its ownership in Sabeco, the country’s largest domestic brewer. Market speculators forecast the ministry could divide its stake in the brewer into various packages and sell them via auctions.
The value of the for-sale shares is estimated at 4.2 billion USD. Sabeco has maintained charter capital of 6.4 trillion VND (284.4 million USD) since its equitisation took place in 2008.
In 2008, Sabeco offered 10 percent of its total shares for sale, of which half were purchased by Dutch brewing company Heineken.
A number of institutional investors and companies have expressed interest in buying Sabeco shares following the Vietnamese Government’s decision to reduce its ownership in the southern brewer.
These potential companies include Australia-based Carlton & United Breweries – member of Belgian Anheuser-Busch InBev, Thai Beverage and Heineken.
Shares of Sabeco traded on the Ho Chi Minh Stock Exchange under code SAB, up 2.2 percent to close October 13 at 272,000 VND (12 USD) per share. At this price, Sabeco’s market capitalisation reached 174.4 trillion VND (7.68 billion USD).
Expectations that the Government would sell its stake in Sabeco helped the share price jump nearly 110 percent since its listing on December 6, 2016.
In 2016, Sabeco recorded 30 trillion VND (1.32 billion USD) in revenue and 4.6 trillion VND in post-tax profit, a yearly increase of 10 percent and 28 percent, respectively.
In the first half of 2017, the company posted 15.75 trillion (693 million USD) in revenue and 2.56 trillion VND in post-tax profit.
Sabeco reportedly owns 40 percent of Vietnam’s beer market. The company has targeted revenue of 34 trillion (1.5 billion USD) for 2017.