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HO CHI MINH CITY (Reuters) - Vietnam's trade ministry has submitted a plan for the divestment of the government's majority stake in Sabeco SAB.HM, the company's CEO said on Tuesday, moving the country's largest brewer one step closer to a long-awaited privatization.
Vietnam has one of the world's most attractive beer markets and the biggest in Southeast Asia, thanks to a young population that consumed nearly 4 billion liters in 2016. Several foreign brewers - from Kirin (2503.T) to Heineken (HEIN.AS) - have been eyeing Sabeco since it was earmarked for privatization.
But the sale of the government stake in cash-generating Sabeco, formerly Saigon Beer, has faced repeated delays. A limited offering last year listed only a fraction of the group, leaving the state with almost 90 percent to divest.
Sabeco Chief Executive Le Hong Xanh told shareholders at the company's annual general meeting that the ministry's divestment plan had been submitted to the government, but gave no details.
"Divestment is a program of the government. The ministry of industry and trade has proposed a plan to the government and it is awaiting approval," the CEO told shareholders. He did not provide any details of the plan.
The Vietnamese government has said it aims to fully divest its stake in Sabeco, but a clear plan has not yet been announced. Sabeco, the country's second-biggest listed firm by market value, is a key plank of a broader privatization effort, which includes dairy firm Vinamilk VNM.HM, Vietnam Airlines HVN.HNO and brewer Habeco BHN.HM.
Foreign companies and their advisers have grumbled over the idiosyncratic two-stage divestment process, including the initial, limited IPO that has meant the price of illiquid Sabeco shares has rocketed. Sabeco listed at 110,000 dong ($4.87) but has touched 227,000 dong.
Sabeco said on Tuesday said it had received approval to appoint Ernst & Young and Bao Viet Securities to advise on the sale of the state stake, worth $5.2 billion at market price.
Sabeco said last week it plans to increase net profit this year to 4.7 trillion dong, up 1 percent from 2016, when net profit jumped 33 percent. It targets beer sales this year of 1.7 billion liters, up 3.4 percent.
Sabeco's main market is Vietnam, but it exports to about 20 countries.
Reporting by Mai Nguyen; Editing by Clara Ferreira Marques and Himani Sarkar