The Vietnam National Textile and Garment Group (Vinatex) is hoping a planned initial public offering will help boost earnings and allow it to invest further in the business.

The Prime Minister of Vietnam approved the privatisation plan of Vinatex on 6 May. According to a stock exchange filing, the company will conduct its IPO on the Ho Chi Minh Stock Exchange on 22 July.

It will offer 24.46% of the company, or 122m shares, at a starting price of VND11,000 (US$0.52) per share.

Vintex noted that 24% would be sold to investors, and 0.46% to employees. The state will retain 51%.

The company said it will be looking for strategic investors that have "good financial potential", a strong brand name and that are "ready to share strategy in the short and long term".

Vinatex deputy general director, Mr Le Tien Truong, believes the company will do better business following privatisation, holding its key role in Vietnam's textile and garment industry.

"During 15 years of privatising its member enterprises, Vinatex has been gathering lots of knowledge and experience," the company said. "Most of Vinatex's member enterprises have been developing well after privatisation, with the dividend from 20 to 25% of their charter capital."

The company will likely list in three years as the process in Vietnam can take longer, with an IPO and listing two separate processes.

Vinatex may also be hoping the IPO will accede with the agreement of the Trans-Pacific Partnership (TPP), which has been under negotiation for five years.

Once approved, it will make Vietnamese garments more competitive than those of China, where Vinatex currently imports a lot of its materials.

Vietnam's textile industry produces for over 50 countries around the world, with the US its largest export market after China.

The country is one of 12 negotiating the TPP trade agreement. Its implementation is expected to boost exports.