PE firms among suitors for PV Gas auction-source 

Last updated: 11/9/2010 17:00 

Vietnam’s state-owned Petro Vietnam Gas Corp (PV Gas) has launched an auction to sell a 15-20 percent stake to raise about US$600 million, with a source directly involved saying private equity firms are expected to show interest in the sale.

The auction may fetch bids from oil companies such as ConocoPhillips, India’s Oil and Natural Gas Corp Ltd (ONGC) and Thailand’s PTT Pcl among others, sources with direct knowledge of the matter said.

Private equity firms that have invested in the sector such as Blackstone Group LP and Kohlberg Kravis Roberts & Co (KKR) are also expected to explore an offer.

The auction comes as PV Gas makes the final preparations for Vietnam’s largest-ever initial public offering. PV Gas is selling about a 5 percent stake through the offering in an about $150 million deal that will give it a market value of about $3 billion.

PV Gas said it was scheduled to price the IPO on Nov. 17.

The company had set a Nov. 12 deadline for strategic investors to submit bids, PV Gas Chief Executive Do Khang Ninh told Reuters.

Potential suitors mentioned in this report either declined to comment or could not be reached for comment. The sources were not authorized to speak publicly because details of the auction are private.

“PV Gas plans to sell the stake this year. After strategic partners are chosen, they need to be approved by PetroVietnam,” Ninh said.

Growing gas demand

PV Gas is Vietnam’s biggest LPG trader, and sources said strong growth for gas demand in Vietnam was the main draw for potential investors.

“The attraction is to get into a fast-growing market,” a source familiar with the matter told Reuters, adding: “The price is attractive enough to get a few strategics interested.”

Morgan Stanley was acting as a sell side adviser to PV Gas on the auction, sources said. Morgan Stanley declined to comment.

The PV Gas IPO and strategic sale will mark a new chapter for Vietnam’s volatile stock markets. A successful IPO could also kick start the stalled privatization of state-owned enterprises.

Source: Reuters

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