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A Thai unit Thai's Beverage has become the only company to bet on a share in Sabeco, the largest beer producer of Vietnam, marking a disappointing response to the largest and most watched privatization in the Southeast Asian country this year.
The privatization of Sabeco has been almost a decade in the making, hitting a series of setbacks and changes in the way the agreement was structured. But it has also been presented as an excellent example of how Vietnam plans to introduce private and foreign shareholders into state-backed groups.
The website of the Ministry of Commerce of Vietnam listed the Thai company as the only one registered for the sale of a stake of at least 25 percent in the brewing company, whose term was Monday. International brewing giants, including InBev and Kirin, expressed preliminary interest in the sale, but did not bid.
The offer from ThaiBev, owned by billionaire Charoen Sirivadhanabhadki, would mark the last foreign investment of a Thai company seeking overseas faster market growth and production with lower wages than in its local market. The Thai company did not comment on its offer.
A 25 percent stake in Sabeco would be worth approximately $ 2.3 billion based on the Vietnamese government's initial offer price of 320,000 dong ($ 14) per share. Vietnam is selling up to 53 percent of Sabeco, which is based in Ho Chi Minh City, and is the dominant brewer in a nation of 92 million people where beer consumption is expanding rapidly.
. However, participation in the auction highlighted the difficulties faced by Vietnamese reformers seeking to privatize the state industry to raise cash. The process, which the Vietnamese reformers call "equitization", has been slow.
Due to Vietnam's doubts about giving administrative control to foreigners, many of the country's largest companies have launched small capital holdings, a strategy critics say will not affect state managers.
The rules published by the government in November said that foreign ownership in Sabeco was limited to 49 percent. Given that foreign shareholders, including Heineken already own 10%, the current sale of shares would allow a foreign buyer to obtain 39%, leaving the Vietnamese shareholders with majority control.
Vietnam aims to raise at least $ 4.8 bn from the transaction. The price of Sabeco's shares has risen almost 59 percent this year, in line with the increase in prices in the general Vietnam stock market.
"There were a number of interested parties, but the complexity of the structure and the price may have been discouraging for other potential bidders," said Fiachra MacCana, head of research at HSC, Vietnam's second largest brokerage by stock market capitalization.
People close to the auction said that the potential buyers of the participation were dissuaded from bidding for the cumbersome requirements surrounding the auction and the short period of time assigned to it. "The bottom line is that all bidders were given 20 days to make a $ 5 billion transaction," said one adviser to one of the bidders who withdrew, who asked not to be identified.
Vietnam is expected to sell a stake in Hanoi Beer Alcohol & Beverage or Habeco, the second largest beer group in the country, in 2018.