VietJet Aviation Joint Stock Co., which controls almost half of Vietnam’s domestic airline market, is going to become the first company in the nation to list on an overseas stock exchange.
“We’ve been approached by some foreign stock exchanges including London, Hong Kong, and Singapore, which expressed their interest in our stock,” said Nguyen Thi Phuong Thao, the VietJet founder and chief executive officer.
The plan is for a 41 trillion dong (about US$1.8 billion) offering and it comes amid the government’s easing of rules to allow more foreign investment in one of the fastest-growing aviation markets.
The capital is intended to fund billions of dollars in aircraft purchases.
“Listing overseas on big markets will help us increase access to more fund sources, boost the trading of our stock and expand the list of our investors,” Nguyen said. “We don’t want to hide our hope to become the first Vietnamese company to list shares overseas.”
Based in Hanoi, VietJet is known for a marketing stunt featuring bikini-clad service crew. The company has begun its operations since six years ago and to date has 136 foreign investors who own 26 percent of the company.
It has received shareholder approval in April to boost its foreign ownership limit to 49 percent from 30 percent.
The increase however still requires an approval by Prime Minister Nguyen Xuan Phuc because aviation is considered a restricted industry, with foreign ownership currently capped at 30 percent.
Shares of VietJet have surged about 50 percent since they began trading in Ho Chi Minh City three months ago, compared with a gain of 6.5 percent in the Bloomberg Asia Pacific Airlines Index.
The budget airline forecasts profit will rise 36 percent this year from 2.5 trillion dong in 2016. VietJet expects to serve 17 million passengers this year, after carrying about 15 million travelers in 2016.
The carrier’s biggest competitor is Vietnam Airlines – a national carrier which owns 70 percent of low-cost operator Jetstar Pacific Airlines Aviation JSC.
“Vietnamese aviation is growing at a high rate,” Thao who owns more than 60 percent of the airline directly and through holding companies said. “When we open the door wider for foreign investors and create more opportunities for them, it also means we increase the chance for the local aviation markets.