Vietnam Airlines Restructuring Plan

On 16 January 2013, the Prime Minister approved the restructuring plan for Vietnam Airlines, the national and largest carrier in Vietnam. The notable points of the restructuring plan include:

  • Vietnam Airlines to be equitised within 2013. This may be an encouraging news for foreign investors interested in Vietnam Airlines who have waited for a long time since the intention to equitise Vietnam Airlines have been floated. However, the Prime Minister does not provide any further details on the proposed equitisation of Vietnam Airlines (e.g capital structure and how many shares will be owned by the Government after equitisation). This indicates that there are still works to be done;
  • Vietnam Airlines to reduce its shareholding in Vietnam Air Petrol Limited Company (VINAPCO) from 100% to more than 50%. Vinapco is currently the only petrol company, which supplies fuel to commercial aircrafts in Vietnam;
  • Vietnam Airlines to divest entirely from its holdings in various companies not relating to air transportation services including Techcombank (a large private joint stock bank with 20% investment from HSBC), Bao Minh Insurance Company, and Hoa Binh Securities Company; and
  • Vietnam Airlines may adopt a sale and lease back arrangement for certain aircrafts currently owned by it.