Japan-based Itochu Corp has bought 5 percent stake in the state-run Vietnam National Textile And Garment Group (Vinatex), according to business magazine Nikkei Asian Review.

Itochu Corp is the third-largest multi-sectoral conglomerate in Japan, after Mitsubishi and Mitsui. With a purchase price of more than 1 billion yen (US$9.25 million), Itochu Corporation became the first non-Japanese financial institution to invest in a big state-owned enterprise (SOE) of Vietnam.

Talking with Tuoi Tre, Tran Quang Nghi, Chairman of Vinatex, confirmed the information, adding that Itochu acquired a certain percentage of Vinatex's shares through public trading channel, not as a strategic investor.

Vietnam’s biggest state-run garment-textile conglomerate launched its initial public offering (IPO) late last month with 90 percent of the shares offered for sale, equivalent to over 110.55 million shares, successfully sold.

Previously, Reuters reported that Vinatex sought to raise at least US$63.4 million by offering 122 million shares, or 24.4 percent, to the public at a starting price of 11,000 dong ($0.52) each. The state will retain 51 percent and the remaining 0.6 percent will be sold to employees.

With an average winning price of VND11,000 per share, the IPO helped Vinatex rake in about VND1.21 trillion ($57.15 million).

It is reported that there were a total of 87 investors registering to buy Vinatex’ shares in the IPO, of which 54 were domestic investors, 18 were foreign individuals, 3 local organizations and 12 foreign institutions.

Earlier, Vingroup (VIC) and the VietNam Investment Development Joint Stock Co (VID) have registered to buy shares to become a strategic partner of Vinatex. Accordingly, VIC and VID have registered buy 10 percent and 14 percent stake of Vinantex, respectively.

In late July this year, Vinatex announced to delay its IPO from July to late September because if the IPO was launched as scheduled, there would not be enough time for investors to understand and evaluate their investments in Vinatex.

According to Vinatex, after two seminars on the IPO held in Hanoi and HCMC earlier, they collected the opinions of many investors and finally came with the decision to reschedule the IPO.

Speaking at the seminar introducing investment opportunities in the shares of Vinatex in Hanoi, Vinatex general director Tran Quang Nghi said it would take at least 3 more years for Vinatex to be a public company.

In favorable cases, if the Trans-Pacific Partnership (TPP) is reached soon, the time can be shortened to 1-2 years. 

Vinatex dominates a local textiles sector that is set to gain strongly from a raft of trade pacts Vietnam is negotiating, including the 12-nation Trans-Pacific Partnership (TPP), which would see it replace China as the biggest garment supplier to the United States market, according to Reuters.

Garments and textiles are Vietnam's second-biggest cash earner after cellphones, netting $18 billion in 2013, with the figure projected to rise to $24 billion this year, Reuters reported.

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