Vietnam says to sell part of Pacific Airlines
HANOI - Vietnam said on Thursday it was seeking a consultant to advise on the partial sale of Pacific Airlines, the country's second-largest airline which escaped closure in late 2004 and is now valued at $167 million.
"The Finance Ministry is looking to hire a consultant for the project," Deputy Finance Minister Le Thi Bang Tam told Reuters on the sidelines of an investment forum in Hanoi.
Last year state-run media said the Finance Ministry, which controlled the then-indebted Pacific Airlines, had picked Singapore state investment firm Temasek Holdings [TEM.UL] to help restructure the airline by 2010.
Vietnam Television has said Temasek will buy a 30 percent stake in Pacific Airlines for $50.1 million.
Tam declined to comment on the final results of negotiations with Temasek.
Sources close to the deal said Vietnam did not reach a final agreement with the Singaporean firm over differences in the time of the purchase. Hanoi had wanted to sell the stake quickly and early, they said.
In December 2004, Pacific Airlines escaped closure after running up debts of up to $13.7 million. The government ordered its parent, national carrier Vietnam Airlines, to either raise new funds through a share issue or shut it down.
Vietnam Airlines and four affiliates owned 94 percent of Pacific Airlines, but the stake was taken control of by the Finance Ministry.
The airline has taken a series of steps to cut operating costs, including re-negotiating leasing contracts and dropping flights linking Hong Kong and Danang in 2004.
"The airline is doing fine now," Tam said, without elaborating.
Reuters - March 16, 2006.
Vietnam Air says needs $1.2 bln for planes by 2010
HANOI - National carrier Vietnam Airlines said on Wednesday it would need to spend around 19 trillion dong ($1.2 billion) to expand its fleet to 56 aircraft by 2010 from 39 now, including using funds from international bond issues.
Board chairman Nguyen Sy Hung said the unlisted airline expected to own 32 planes of the 56 aircraft in 2010.
"Our policy to raise funds includes issuing bonds," Hung told an investment forum in Hanoi. "We will ask the government for approval before going into a detailed project for the issue."
Vietnam Airlines projected revenues would grow more than 10 percent annually from now until 2010, when they should reach $2 billion, he said.
The airline reported average revenue growth of 20.5 percent a year during the 2001-2005 period. Hung said revenues hit nearly $1.3 billion in 2005, even though the country suffered from bird flu and higher fuel costs.
The expansion of the airline's fleet, expected to have 100 aircraft by 2020, was to meet demand in Vietnam which would rise 13 percent to 14 percent annually over the next five years.
The $1.2 billion investment was part of an overall 25.3 trillion dong ($1.6 billion) plan which would also go to building infrastructure and training pilots, Hung said.
"In 2006-2007 we will look into opening a direct flight to North America," he said.
Vietnam Airlines had planned to launch the direct flight to the United States -- home to an estimated 1.5 million people of Vietnamese origin -- in the middle of 2006.
But in January, Deputy General Director Pham Ngoc Minh was quoted by state media as saying that a number of reasons, including a shortage of aircraft, meant a delay until 2007.
Last June, Vietnam Airlines signed a deal to buy four Boeing Co. 787 "Dreamliner" aircraft worth around $500 million at list prices for delivery in 2009 and 2010.
At present, the airline operates Boeing 777s and 767s and Airbus A320 and A321 planes.
Reuters - March 15, 2006.
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