State Capital Investment Corporation (SCIC), the investment arm of the Vietnamese government, is looking to funnel VND8 trillion (US$347 million) into the charter capital of the flagship air carrier Vietnam Airlines.
On Thursday, Nguyen Chi Thanh, CEO of SCIC, revealed that the state-owned company is working with Vietnam Airlines to settle the share prices for the airline’s incoming offerings.
As per the government’s Resolution 194 on the bailout for Vietnam Airlines in light of the COVID-19 crisis, the air carrier is allowed to offer more shares to existing shareholders to increase its charter capital. The government has assigned the SCIC to buy shares of Vietnam Airlines.
While Vietnam Airlines is devising the plan to increase its capital via share offering before submitting it for appraisal of the State Securities Committee, SCIC is working to set an offering price that matches the market evaluation, Thanh said.
According to the SCIC leader, in order to set a proper price, Vietnam Airlines must figure out its corporate value, which in turn requires a business plan for no less than five years.
However, the business has yet to provide a long-term business plan as its future are still kept in limbo, with the date for resumption of international flights – a significant baseline for the plan – is still largely uncertain.
“As the development of the pandemic on the world remains unpredictable, it is hard to establish a business plan for Vietnam Airlines. Without it, we can’t assess the value of the company. Only when Vietnam Airlines returns on international routes can its business operation recover,’ Thanh remarked.
On behalf of SCIC, Thanh suggested enlisting the help of a reliable international auditing firm to assess the corporate value of Vietnam Airlines.
Meanwhile, SCIC will continue working closely with the airline and report to the Committee for Management of State Capital at Enterprises as well as other relevant authorities to ensure the efficiency and lawfulness of the investment process.