Dung Quat oil refinery's operator BSR seeks investors on possible stake cut by Petrovietnam

Binh Son Refining and Petrochemical JSC (HoSE: BSR), operator of Vietnam’s Dung Quat Refinery, is in talks with potential investors as state-run Petrovietnam might trim its stake to comply with new listing rules, said executives.

Petrovietnam currently holds 92.13% of BSR but must reduce that to a maximum 90% to meet the amended Securities Law, which requires at least a 10% free float, broker Vietcap Securities cited BSR executives as saying at an investor meeting on Monday.

This may translate to a potential 2.13% divestment by Petrovietnam in the near term, the executives implied, adding that talks with prospective investors are under way.

The refiner is seeking a strategic partner that could bring financial support, crude supply, or global distribution capacity to aid its planned expansion, they stated.

Seperately, BSR is finalizing plans to raise charter capital by 61.5% to VND50 trillion ($1.9 billion) through a stock dividend, with 31.5% funded by its development fund and 30% from retained earnings. The issuance is expected to be completed in the second half of 2025, subject to regulatory approval.

Executives confirmed that its Dung Quat Biofuel plant (BSR-BF) is slated to restart in November 2025, ahead of the government’s planned rollout of E10 gasoline in 2026.

Domestic ethanol demand is estimated at 1.2-1.5 million cubic meters annually, while the current capacity of 450,000 cubic meters covers only 40% of needs. BSR-BF, with 100,000 cubic meters of annual capacity, is seen well-positioned given its proximity to feedstock sources in the central region and integration with the refinery for blending.

The upgrade and expansion of Dung Quat Refinery remains on track, with an EPC contract expected in December 2025 and disbursement planned between 2026 and 2028.

BSR holds $1.2 billion in net cash, enough to cover up to 80% of the $1.5 billion upgrade billion project, and intends to prioritize equity funding in 2026 to curb financing costs.

The project is aligned with Vietnam’s goal of boosting fuel self-sufficiency rate to 70% and is projected to lift capacity by 15% upon completion in 2028.

In the first half of 2025, BSR posted net revenue of VND68.7 trillion ($2.6 billion), up 25% year-on-year. Net profit fell 35% to VND1.2 trillion ($45.5 million) but already exceeded 16% of the company’s full-year target.

On the Ho Chi Minh Stock Exchange (HoSE), BSR shares closed Wednesday at VND27,100 ($1.03) apiece.