Vietnam’s largest fuel retailer Petrolimex on Wednesday announced a plan to sell an 8 percent stake to Japan’s JX Nippon Oil & Energy to raise money for restructuring a loss-making unit in Singapore.
Bui Ngoc Bao, board chairman of the state-owned corporation, said at a shareholders meeting that it expects to raise at least US$176.4 million from selling 103.5 million shares to the Tokyo-based company.
Bao said the two companies have been negotiating the deal for two years. Petrolimex previously planned to sell a 20 percent stake, but decided to offer less to the Japanese investors amid a weak market, he said, as cited by news website VnExpress.
Petrolimex, which sells more than half of oil products in Vietnam, has been trying to sell shares to private investors since its IPO in 2011. It is expected to reduce the state-owned stake from around 95 percent to as low as 65 percent.
Once the deal is closed, Bao said, he will seek the shareholders’ agreement to let JX Nippon have one member in Petrolimex board of directors.
A Petrolimex statement said part of the money earned from the deal will be spent on restructuring Petrolimex Singapore, which has lost "trillions of dong."
In December 2014 Petrolimex signed a memorandum of understanding with the Japanese firm, under which JX Nippon would become a strategic investor in Petrolimex.
As part of the deal, JX Nippon, established in 2010, will provide technical support with payment methods and gas station management.