UPDATE 2-Vietnam IT firm plans IPO; Intel unit buys stake http://today.reuters.com/news/articleinvesting.aspx?type=newIssuesNews&storyID=2006-10-24T131640Z_01_HAN229616_RTRIDST_0_TECH-VIETNAM-IPO-UPDATE-2.XML
Tue Oct 24, 2006
(Updates with listing date, investment details, quotes)
(For a Vietnam IPO diary click <VN/IPOMENU>)
By Grant McCool
HANOI, Oct 24 (Reuters) - Vietnam's largest information technology firm, FPT, has sold a stake to two foreign investors for $36.5 million and plans an IPO by year end, company officials said on Tuesday.
The company, valued at over $600 million at unofficial market prices and seen as a hot stock among local investors, said it had sold the unspecified stake to private equity firm Texas Pacific Group [TPG.UL] and Intel Capital, a unit of Intel Corp. (INTC.O: Quote, Profile, Research).
"This is the first time in Vietnam you have had significant offshore private equity, venture capital players take significant stakes in a company like FPT," said Peter Ryder, chief executive officer of Hanoi-based Indochina Capital investment firm.
Communist Party-ruled Vietnam has one of the world's fastest expanding economies after China, and its six-year-old Ho Chi Minh City Securities Trading Center <.VNI> has been the fastest-growing index in Asia this year. It has 51 listed companies and a market capitalisation of about $3 billion. Many companies are racing to have their shares listed before changes to corporate tax laws start on Jan. 1, 2007. The government has said a 50 percent corporate tax relief granted to listed companies for the first two years after their listing will no longer be available after the end of 2006. "We want to make the listing within this year in order to earn incentives such as tax reduction," FPT chief executive officer Truong Gia Binh said at a news conference.
The company provides systems integration, software services, telecommunications and Internet services, as well as e-media content. It also provides software-development services in Japan, but said it aims to expand to other countries.
FPT shares, of which there are 60.8 million in total, change hands at around 160,000 dong to 180,000 dong ($10-$11) each on the over-the-counter market, traders said.
The company will rank among the most valuable listed companies behind dairy firm Vinamilk <VNM.HM> and Sacombank <STB.HM> if it was valued at current unofficial prices.
Binh said the company's main investment objectives were in Internet services, software development and its education and training centre called FPT University.
The partly privatised Hanoi-based firm had sales of more than $517 million in 2005 from operations that range across information and communications-technology services. Binh said the company made $17.4 million in profits last year and expected profits to grow 40 percent this year.
He said the Vietnam government had an 8 percent stake in FPT. Officials from the two new foreign investors, who took just six weeks to reach a deal with FPT, said they had a minority stake but they declined to disclose details. The State Securities Commission confirmed it had received an application from FPT to list its shares. ($1=16,037 dong)
(Additional reporting by Nguyen Nhat Lam)
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