The US-based Global Emerging Markets Fund (GEM) will be investing VND 1700 billion ($80 million) in Hoang Anh Gia Lai JSC (HAGL). According to the terms of the deal, GEM will acquire 10% stake in HAGL mainly through the acquisition of shares from shareholders and existing investors. This transaction is expected to be completed within three months.
As per the agreement, GEM will get representation on a seat on HAGL’s board and will also support HAGL’s listing in the international markets, especially in the US.
Martin Doan – GEM’s representative- said that his company “is really interested in agricultural products of HAGL” and the stock price or the market condition will not affect the company’s commitment to this deal. The deal will be one of the largest components of the $200 million capital outlay that GEM has decided to invest in Vietnam.
HAGL currently possesses more than 100,000 hectares of land in Laos, Cambodia, and has grown 75,000 hectares of plantations for rubber, sugar cane, corn and palm oil. The company is building palm oil processing factories in these countries. The remaining land area will be used for breeding cattle and planting oil palm.
Founded in 1993, HAGL started as a furniture/wood manufacturer. Today, the company’s main focus is agribusiness and real estate. HAGL had VND 777 billion in revenue for the first nine months of 2014, up by 29% compared to the same period last year.
According to the company website, Global Emerging Markets (GEM) is a US-based $3.4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets across the world. GEM’s funds include CITIC / GEM Fund, VC Bank / GEM Mena Fund, Kinderhook, GEM Global Yield Fund; GEM India Advisors and Brazil PE Fund.
Earlier, in August this year, the Global Fund Emerging Markets (GEM) has agreed to strategically invest in Duc Long Gia Lai Group (DLGL) and acquired 20% equity.