28/9/2018 – Vietnamese first budget airline VietJet has announced its plan to issue and list US$300 million convertible bonds on the Singapore Stock Exchange (SGX).
According to VietJet, the airline company will issue 3,000 bonds with a maturity term of 5 years (i.e. 4% per annum) at the par value of US$100,000 per unit.
The bonds will be issued at face value and traded on the international market, which can be expected in Q4 2018. Contingent payments which are subjected to market conditions will be made once every 6 months.
In a notice to its shareholders, VietJet said this all lies in accordance with the foreign ownership limit regulated by law. VietJet’s current overseas investors include BNP Paribas, Deutsche Bank, JP Morgan, and Singapore sovereign fund GIC.
Besides, VietJet will also issue up to 28 million new shares to exercise the conversion. The conversion price will be in reference to the price of VJC shares at the time of issuance multiplied by the conversion factor which is estimated at 35 percent.
If successful, the total capital from the listing will be spent on business development and enhancing the company’s air transport capacity.
Founded by Nguyen Thi Phuong Tho in 2007, VietJet is an international low-cost airline from Vietnam. It has a market cap standing at US$3.6 billion and holds 43 percent market share in Vietnam, surpassing the state-owned Vietnam Airline and its low-cost partnership JetStar.
VietJet has been the headline target since its preparation for IPO, which raised US$170 million in 2016. It was Vietnam’s first and biggest internationally marketed offer. The company listed in early 2017 and currently see its stock in the region of VND40,000 apiece (about US$1.70), marking a corporate valuation of US$2.5 billion.
The budget airline company has also marketed its overseas listing ambition since the IPO, seeking the possibility in not just Singapore but markets like London, Hong Kong, and New York as well.