* Vinalines sells only 1.11 percent of the shares offered
* Demand bleak amid shipping sector woes -CEO
* To list shares on local market within the next three months (Adds background and comments from Vinalines CEO)
HANOI, Sept 5 (Reuters) – Vietnam National Shipping Lines, a state-owned shipping firm, raised a meagre 54.3 billion dong ($2.33 million) from an initial public offering (PO), far below its target of 4.89 trillion dong, the Hanoi Stock Exchange said on Wednesday.
The company, better known as Vinalines, sold 5.43 million shares or only 1.11 percent of the shares offered at the IPO at an average price of 10,002 dong apiece.
“Though Vinalines’ business performance has improved recently … the shipping industry hasn’t got out of a time of crisis,” CEO Nguyen Canh Tinh told local media.
“This is why the IPO didn’t attract investors in the short term,” the CEO added.
The global shipping industry has been in a crisis for a decade, suffering from oversupply that has triggered a wave of bankruptcies. While the sector is slowly recovering, there are fears trade disputes, especially between the United States and China, and emerging market turmoil will lead to another downturn before it has had a chance to fully heal.
Vinalines shares will be listed on a local stock market within the next three months, CEO Tinh was quoted by state-run Giao Thong newspaper as saying.
Vinalines sold the shares to 39 individual investors and two corporate investors. Foreign investors bought 6,200 shares.
The float is part of Vietnam’s ambitious plans for IPOs for 64 state firm this year, as it looks to fill government coffers at a time when public debt levels are nearing the mandated ceiling of 65 percent of its gross domestic product (GDP).
However, shares of several state-owned firms have cratered after their IPOs in a broader market that has given up 19.4 percent since hitting a record in April amid concerns over trade tariffs and their impact on the economy.
Shares of Binh Son Refining and Petrochemical, for example, have fallen 48 percent since a debut in March, while PetroVietnam Power Corp has dropped 22 percent.
Vinalines was seeking to raise around $210 million from the sale of 488.82 million shares, or a 34.8 percent stake, at its IPO, bookrunner Saigon Securities said last month. ($1 = 23,313 dong) (Reporting by Khanh Vu; Editing by Himani Sarkar)