BIDV SECURITIES COMPANY INVESTOR SHOULD CAREFULLY READ THIS PROSPECTUS AND THE AUCTION REGULATION IN ITS ENTIRETY BEFORE MAKING A DECISION TO PURCHASE 1 THE AUCTIONEER HO CHI MINH STOCK EXCHANGE Address: 16 Vo Van Kiet Str., 1 Dist., Ho Chi Minh City Telephone: (84.8) 38217713 Fax: (84.8) 38217452 THE ISSUER VIETNAM AIRLINES COMPANY LIMITED Address: 200 Nguyen Son Str., Long Bien Dist., Hà Nội Telephone: (84.4) 38272289 Fax: (84.4) 38722375 DOMESTIC ADVISOR BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM SECURITIES JOINT STOCK COMPANY Headquarter: 10th Floor BIDV Tower, 35 Hàng Voi Str., Hoan Kiem Dist, Ha Noi Telephone: (84.4) 39352722 Fax: (84.4) 22200669 Branch: 9th Floor, 146 Nguyen Cong Tru Str., 1 Dist., Ho Chi Minh City Telephone: (84.8) 39142956 Fax: (84.8) 38218510 THIS PROSPECTUS AND SUPPORTING DOCUMENTS ARE PROVIDED BY THE ISSUER, THE AUCTIONEER, THE ADVISOR, AND AGENCIES LISTED IN THE AUCTION REGULATION 2 TABLE OF CONTENTS Part I. Introduction ....................... 4 Subsidiary Operational And Financial The Public Offering .................... 5 Performance .......................... 55 Post IPO Ownership Structure ............ 5 The Airlines Industry And Our Competitive Part II. General Information ................ 6 Position .............................. 56 Legal Basis Of The Offering ............. 6 Part V. Post-IPO Strategic Direction ......... 60 Auctioneer, Issuer And Domestic Advisor’s Post-IPO Company Profile ............... 60 Contacts ............................. 8 Post-IPO Strategic Direction ............. 64 The Responsibles For Information Related To Part VI. The Offering ..................... 77 Vietnam Airlines’equitization ............ 9 Risk Factors .......................... 77 Forward-Looking Statements ............. 11 The Offering And Payment Method ........ 81 Part III. Overview Of The Equitized Use Of Proceeds ....................... 85 Organization ............................ 12 Listing ............................... 86 Company Profile ...................... 12 Part VII. Conclusion ...................... 87 Management .......................... 17 Part VIII. Appendices ..................... 88 Workforce ........................... 22 Appendix 1: Operating Performance Of Our Valuation Results ...................... 23 Subsidiaries .......................... 88 Principal Assets Of Our Business ......... 26 Appendix 2: Property As Of st Part IV. Business ........................ 32 March 31 2013 ..................... 107 Our Business Prior To Equitization ........ 32 Appendix 3: On-Going Contracts And Group Operating And Financial Results .... 50 Commitments ....................... 113 3 PART I. INTRODUCTION This is an innitial public offering of Vietnam Airlines’ common stock, a step in our equitization process. Neither we, nor the advisors, have authorized any party to provide you with additional information or information different from that contained in (i) this prospectus, (ii) the Bidding Form, and the (iii) Auction Regulation. You should rely only on these documents to make purchase decision. We take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. We are offering to sell shares of our common stock only in jurisdictions where offers and sales are permitted. If you have any questions regarding this prospectus, you should inquire independent advisors. The information appearing herein is accurate only as of the date of this prospectus. Our business, financial conditions, liquidity, and operating results may have changed since that date. Vietnam Airlines Ltd. is a 100% state-owned company. We are currently in the equitization process to raise capital through shares offering while retaining the State’s existing equity. The number of shares issued in the upcoming offering will account for 25% of our share capital after equitization. We will continue to assume the existing rights, obligations, and benefits in accordance with applicable laws. Upon obtaining business license, Vietnam Airlines will have legal capacity as stated in the law of Vietnam including official seal and corporate bank account, and will operate under the State’s law and our Charter. As a part of our equitization process to become a joint stock company, we are offering to sell our Vietnam Airlines’shares. Investors will be Vietnam Airlines Joint Stock Company’s shareholders and assume all rights and obligations as stated in the State’s law and our Charter. 4 THE PUBLIC OFFERING Common stock offered to public ....................... 49,009,008 shares Par value ................................ ............ 10,000 VND Public Offering Price ................................ 22,300 VND per share Minimum bidding volume ............................ 100 shares Maximum bidding volume ............................ 49,009,008 shares Type of auction ................................ ...... 2-level auction at Ho Chi Minh Stock Exchange. Investors will submit Bidding Forms at designated agencies and the forms will be forwarded to the stock exchange. Participants ................................ ......... Domestic & foreign individual and institutional investors meeting the requirements in The Auction Regulation of Vietnam Airlines. Prospectus ................................ .......... Provided by agencies in Auction Regulation and their websites, and at www.hsx.vn, www.bsc.com.vn and www.vietnamairlines.com. Registration locations ................................ At designated agencies stated in the Auction Regulation. Deadlines for Registration Form submission, Deposit, and Bidding Form acceptance ............................. As stated in the Auction Regulation Deposit requirements ................................ 10% of registered shares at par value. Bidding Form submission period ...................... As stated in the Auction Regulation. Auctioneer ................................ ......... HO CHI MINH STOCK EXCHANGE Address ................................ ............. 16 Vo Van Kiet Str., 1 Dist., Ho Chi Minh City Shares Payment, outstanding payment, and deposit refund As stated in the Auction Regulation. deadlines ................................ ............ POST IPO OWNERSHIP STRUCTURE Total value % Number of shares (billion VND) The State ................................ ....... 75.00 1,057,638,000 10,576.38 Additional shares issued ........................... 25.00 352,546,000 3,525.46 Shares offered to public ........................... 3.475 49,009,008 490.09 Shares offered to foreign strategic investors ........ 20.00 282,036,800 2,820.36 Shares offered to employees at a discount .......... 1.475 20,795,100 207,951 Shares offered to Vietnam Airlines’ Union ......... 0.05 705,092 7.05 Total ................................ .... 100 1,410,184,000 14,101.84 5 PART II. GENERAL INFORMATION LEGAL BASIS OF THE OFFERING Legal basis for state-owned company equitization Decree No. 59/2011/NĐ-CP dated 18/07/2011 by the Government on wholly state-owned company equitization; Decree No. 189/2013/NĐ-CP dated 20/11/2013 by the Government amending and supplementing a number of articles of Decree 59/2011/NĐ-CP; Circular No. 196/2011/TT_BTC dated 26/12/2011 by the Ministry of Finance on initial public offering and use of proceeds of 100% state-owned enterprises; Circular No. 202/2011/TT-BTC dated 30/12/2011 by the Ministry of Finance on the restructuring and valuation of 100% state-owned enterprises for equitization; Circular No. 33/2012/TT-BLĐTBXH by the Ministry of Labor, Invalids and Social Affairs on employee benefits stated in Decree 59/2011/NĐ-CP dated 18/07/2011 by The Government on 100% state-owned company equitization; Decision No. 929/QĐ-TTg dated 17/07/2012 by the Prime Minister ratifying “Restructuring state-owned enterprises, focusing on large groups and corporations for the period 2011- 2015 ” project; Other relevant regulations. Legal basis for Vietnam Airlines’ equitization Decision No. 172/QĐ-TTg dated 16/01/2013 by the Prime Minister ratifying Vietnam Airlines equitization project for the 2012-2015 cycle; Dispatch No. 1567/TTg-CN dated 18/10/2007 by the Government Office ratifying aircraft purchases and fleet development plan until 2015 and 2020; Dispatch No. 1567/TTg-KTN dated 22/09/2008 by the Prime Minister ratifying fleet development plan of Vietnam Airlines and Vietnam Aircraft Leasing Company; Dispatch No. 291/VPCP-ĐMDN dated 14/01/2008 by the Government Office on Vietnam Airlines’ equitization; Dispatch No. 2129/VPCP-ĐMDN dated 15/11/2011 by the Prime Minister ratifying Vietnam Airlines’ restructuring plan Dispatch No. 3184/VPCP-ĐMDN dated 07/05/2014 by the Government Office ratifying Vietnam Airlines’ valuation result; Decision No. 1964/QĐ-BGTVT dated 27/06/2007 by the Minister of Transport on establishment of Vietnam Airlines’ equitization steering committee; Decision No. 1641/QĐ-BCĐ.CPH-TCTHK dated 14/08/2007 by the Head of equitization steering committee on establishment of steering committee’s support team; Decision No. 517/QĐ-BGTVT dated 12/03/2012 by the Minister of Transport on structuring Vietnam Airlines’ equitization steering committee; Decision No. 763/QĐ-BCĐ.CPH-TCTHK DATED 18/05/2012 by the Head of equitization steering committee on structuring of support team; 6 Decision No. 1792/QĐ-BCĐ.CPH/TCTHK dated 29/10/2012 by the Head of equitization steering committee on restructuring of support team; Dispatch No. 315/BGTVT-TC dated 09/01/2013 by the Ministry of Finance on Vietnam Airlines’ date of valuation for