International Finance Corporation (IFC), a member of the World Bank Group, is considering a $20 million debt investment in Vietnam-based plastic manufacturer An Phat Holdings to fund its first compostable material manufacturing plant in the northern province Hai Duong, according to a disclosure.
The investment, which is a 7-year-convertible loan, will be used to support the implementation of a PBAT (polybutylene adipate terephthalate) plant with a capacity of 20,000 MT per year and PBAT compound plant with a capacity of 21,000MTper year.
The project is estimated to cost $82 million which would be funded by a $20 million IFC convertible loan; $30 million equity and $32 million bank borrowings and convertible loans from other investors.
APH targets that by 2023 compostable products will contribute 40-50 per cent of the group’s packaging revenue.
An Phat Holdings currently has two main subsidiaries including An Phat Bioplastics Joint Stock Company (AAA) and Hanoi Plastics Joint Stock Company (Hanoi Plastics). Of which, AAA is one of Vietnam’s primarily produces conventional, compostable as well as industrial bags.
Pham Anh Duong, Nguyen Le Trung, Pham Hoang Viet and Dinh Xuan Cuong are the major shareholders in APH with total ownership of 49.5 per cent. Institutional and retail investors own the rest.
APH was listed on Ho Chi Minh Stock Exchange on July 28 this year and had a market capitalization of $414 million (as of Oct 16, 2020).
In July, IFC approved a total commitment of $60 million to Vietnam-focused private equity firm Mekong Capital’s latest fund. Earlier, the World Bank Group’s private lending arm, said it is providing a financing package of $75 million to Vietnam-based real estate firm Phu My Hung Development Corporation to help sustain its operations in the wake of the COVID-19 pandemic.