Retail giant Petrolimex successfully divests from PGBank

Petrolimex, Vietnam's biggest gasoline retailer in terms of market share, successfully sold all 120 million of its PGBank shares on Friday via an auction on the Ho Chi Minh Stock Exchange (HoSE).

The shares, accounting for 40% of total PGBank shares, registered on the unlisted public company market (UpCOM) as PGB, were offered at a starting price of VND21,300 ($0.91) per unit.

Four investors - three organizations and one individual - won the auction with an average price of VND21,400 per share, 0.4% higher than the offering price.

The transaction means Petrolimex entirely divested from PGBank and collected VND2,568 billion ($109.5 million).

The HoSE had earlier announced that 16 domestic investors (nine individuals and seven organizations) had registered to buy nearly 213 million PGB shares, 80% higher than those up for sale.

Divestment from PGBank was planned by Petrolimex in 2015 when the bank signed a merger agreement with VietinBank, one of the four largest state-run banks in Vietnam.

In early 2018, VietinBank said it had halted the merger of PGBank after nearly two years of negotiations. In April 2018, PGBank inked a merger contract with HDBank, approved in principle by the State Bank of Vietnam. However, the deal entered a stalemate and in early 2021, both PGBank and HDBank announced the merger had fallen through.

An important reason for these M&A failures was that a large percentage of PGB shares belonged to TNG Holdings. On its website, TNG Holdings Vietnam lists two affiliated companies in the banking sector, namely PGBank and Maritime Bank.

PGBank was approached by a number of private corporations during the booming corporate bond period. However, at present, small banks like PGBank see narrow room for development.

In a related development, Maritime Bank (MSB) revealed that is looking to merge with a local bank that it deems suitable to its development orientation, helping the lender expand more rapidly.

MSB is preparing to submit the plan at its upcoming annual general meeting of shareholders for approval, with PGBank as one of the banks being considered.

Taking in a PGBank merger is expected to help MSB to grow strongly amid increasingly fierce competition among banks and limited room for medium and small lenders to expand, according to the bank.