Pha Lai Thermal Power Company to Go Public

 

Pha Lai Thermal Power Company was set up in 1982, under the Vietnam Electricity Co. No. 1. In April 1995, the company became an affiliate of Electricity Vietnam (EVN). On March 30, 2005, the Ministry of Industry decided to allow Pha Lai Thermal Power Co. to become a joint stock company under the direct management of EVN. The company began being responsible for its financial matters on July 1, 2005. By December 31, 2004, the value of Pha Lai Thermal Power Co was valued at VND10,685 billion (US$677 million), of which the State sector held VND3,107 billion (US$194.15 million). At present, the company is conducting procedures to sell its shares.

 

The company currently runs the Pha Lai Thermal Power Plant 1 and the Pha Lai Thermal Power Plant 2, with six turbines with a combined capacity of 1,040 MW. One of the strong points for the company’s business it’s the favourable location of its factories. Pha Lai thermal power plants are near Vang Danh and Mao Khe coal mines so that the company can buy fuel coal at quite low prices and can save large sums on transport costs. In addition, in recent years, Pha Lai Thermal Power Plant 1 has received handsome investments from EVN to repair and upgrade its facilities. Hence, although the plant has been operational for over 20 years, its turbines still run at 85-90 per cent of their designed capacities. The Pha Lai Thermal Power Plant 2 has had modern equipment installed to secure long-term and stable operation of its electricity generation. After equitisation, the company hopes to earn post-tax profits of between VND300 billion (US$19 million) and VND500 billion (US$31.25 million) a year and the company expects to pay dividends at a rate of 12 per cent per year.

 

Also after equitisation, the company will become involved in other business areas in which it has strong points. The company plans to set up the Pha Lai repair service centre with an investment of VND200 billion (US$12.5 million), a plaster production factory, a cinder production factory and a factory to produce clean ash for concrete products. Clean ash will be sold to the Son La hydropower project in the next five years and other hydropower plant projects at a later date.

According to Dr Dang Phan Tuong, head of the EVN Equitisation and Stock Exchange Division, the Pha Lai Thermal Power Co. will be listed on the Hanoi Securities Trading Centre with registered capital of VND3,107 billion (US$194.15 million), the largest on the Vietnamese stock exchange.

 

According to Ms Pham Thi Tuyet Mai, director of the Incombank Securities Co. (IBS), in order to help the Pha Lai Thermal Power Co. to auction shares, IBS will cooperate with the Vietnam State Securities Commission and the Pha Lai Thermal Power Company to host representations on investment opportunities in the company issue in Hanoi and Ho Chi Minh City. The first auction session is set to open in the afternoon of November 25, 2005 at Hanoi Securities Trading Centre