Vietjet approves $85 mln bond issuing plan

Vietnamese budget carrier Vietjet Air has approved a plan to issue bonds worth VND2 trillion ($85.14 million) through a private placement.

The bonds will have a par value of VND100 million ($4,256) each, with a term of five years. These are non-convertible bonds without collateral.

The purpose of the issuance is to supplement the company's capital for production and business activities, and to pay operating expenses.

The maximum fixed interest rate is 12% per year for the first two interest periods, while the figure for the remaining interest periods will be a maximum 3.5%/year plus the reference interest rate. The reference interest rate is the average 12-month deposit rate for individuals announced by four banks, namely Vietcombank, HDBank, Vietinbank and BIDV.

Issued bonds can be redeemed 12 months from the time of issuance or redeemed in accordance with current law. Vietjet said that the bonds will be issued in the form of bookkeeping, through an issuing agent.

Vietjet also plans to offer new shares, which can be ordinary shares and/or preferred shares. The total number of shares to be issued must not exceed 20% of the number of outstanding shares at the time of offering.

The company currently has 541.6 million VJC shares in circulation, so the maximum issuance volume is expected to be more than 108 million units.

Vietjet also intends to issue ordinary shares through a private placement. The number of ordinary shares offered for sale shall not exceed 10% of the total number of outstanding shares at the time of offering.

The firm recorded an after-tax profit of nearly VND173 billion ($7.37 million) in the first quarter of 2023, down 29% year-on-year, while national flag carrier Vietnam Airlines made a loss of VND37.3 billion ($1.59 million).

It earned a net revenue of VND12.9 trillion ($549.67 million), up 2.8 times, according to the carrier's financial statement.

In Q1/2023, Vietjet operated 31,300 flights, transporting nearly 5.4 million passengers, up 57% and 75% compared to Q1/2022, respectively. The airline's flights achieved an average seat occupancy rate of 85%.

The total volume of goods transported by Vietjet in the quarter reached more than 14,800 tons, up 20% over the same period in 2022.

International passenger transport continued to be a bright spot, contributing nearly 45% of total passenger transport revenue and accounting for 30% of the number of flights and passengers.

As of March 31, Vietjet's total assets had stood at VND69.2 trillion ($2.95 billion).

The Vietjet Aviation Joint Stock Company is listed on the Ho Chi Minh Stock Exchange as VJC. It closed Wednesday at VND97,500 ($4.15) a share.