Vietnam’s first budget airline Vietjet has announced its plan to issue and list $300 million convertible bonds on the Singapore stock exchange (SGX).
Specifically, the company will issue 3,000 five-year term notes at the par value of $100,000, scheduled until the end of 2018. The yield of the bonds will be below 5 per cent.
In conjunction with the bond issuance, Vietjet will issue up to 28 million new shares to exercise the conversion. This is in accordance with the foreign ownership limit regulated by law, the company said, in its notice to shareholders.
The current cap for Vietjet is 30 per cent, and the low-cost carrier is lobbying with the government to lift it to 49 per cent.
The convertible bond plan is subject to shareholder approval.
Last month, property major Vingroup also solicited $400 million from selling convertible dividend preference shares to South Korea’s Hanwha Asset Management.
Vietjet has been the headline target since its preparation for IPO, which raised $170 million in 2016. It was Vietnam’s first and biggest internationally marketed offer.
Vietjet’s overseas investors include BNP Paribas, Deutsche Bank, JP Morgan and GIC. The Singapore sovereign fund, initially a 5.5 per cent shareholder, has pared its stake to 4.97 per cent.
The carrier’s shares were priced at VND152,400 ($6.6) on Thursday, representing a 50 per cent jump since its debut 1.5 years ago. The company’s current market cap stands at $3.6 billion.
Vietjet has also marketed its overseas listing ambition since the IPO, seeking the possibility in markets like London, Hong Kong, Singapore and New York.
The company takes up a 43 per cent market share, surpassing the state-owned rival Vietnam Airlines and its low-cost partnership Jetstar. Vietnam Airlines was also listed in early 2017. Its stock at times dipped by half in price and currently is in the region of VND40,000 apiece, marking a corporate valuation of $2.5 billion.
According to a report on Dealstreetasia