M.Stanley buys $217 mln stake in Petrovietnam's PVFC

HANOI (Reuters) - Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) has paid $217 million for a 10 percent stake in Petrovietnam Finance Corp (PVFC), the financial arm of Vietnam's state oil firm said on Friday, ahead of an expected stock market listing early next year.

Morgan Stanley has been stepping up its operations in communist Vietnam, where booming growth and a freeing up of the economy is fuelling strong demand for financial services. Prior to PVFC deal, Morgan Stanely established a securities joint venture with state-run State Capital Investment Corporation.

Hanoi-based PVFC said the U.S. investment bank had paid 69,974 dong ($4.34) a share, the same average price retail investors paid at PVFC's initial public offering in October.

PVFC works as a de facto bank for oil monopoly Petrovietnam and finances energy sector projects. Its total assets this year would more than triple to 56 trillion dong ($3.48 billion) and rise further to 68 trillion dong next year, the company said.

The company raised $259 million from selling a 11.93 percent at the October IPO, valuing it at nearly $2.2 billion.

PVFC has already announced that it plans to sell a further 8 percent stake to a foreign strategic partner, but is yet to name the investor.

A PVFC official told Reuters last month the firm had completed its application to list on the Ho Chi Minh Stock Exchange .VNI in the first quarter of 2008. Vietnam, which joined the World Trade Organization in January, holds IPOs separately from stock market listings.

Petrovietnam is slated to reduce its holding in PVFC to 60 percent next year from 70 percent now, PVFC said.

The company's revenues are projected to grow by two-third to 5 trillion dong next year, slowing from a three-fold rise this year, according to reports released to a shareholder meeting on Thursday.