Mekong Capital, Vietnam-focused private equity firm, has registered to sell 2.24 million shares, or a 2.1 per cent stake, in Vietnam’s leading mobile device retailer Mobile World (MWG). The fund’s partial divestment in MWG will further reduce Mekong’s stake (in MWG) to 12.22 per cent.
The Ho Chi Minh City Stock Exchange announced that the transaction would be conducted within a month, beginning last Monday, through Mekong Enterprise Fund II Ltd – a member fund of the PE company.
Share value of the fund reached approximately $76 million, by the time of the transaction as MWG ended December 29 at VND106,000 ($5).
The stock exchange also stated that the purpose of the transaction was to divest part of Mekong’s capital in Mobile World. According to an earlier statement by the company, Mekong Enterprise Fund II had sold nine per cent equity in the Mobile World before the Vietnamese firm listed last year, booking returns that were 22 times higher than the initial investment.
Previously, in March 2013, after selling 6.7 per cent, Mekong Capital said the proceeds they had gained were larger by 11 times compared to its investment.
The fund once planned to fully divest its capital in 2012. However, due to the huge potential of Mobile World and the gloomy prospect of the domestic market, it decided to stay invested (in MWG).
The fund invested $3.5 million into Mobile World for a 35 per cent stake and became a strategic partner in 2007. During the relationship, Mekong Capital supported Mobile World, connecting the company with BestBuy and many global retailers.
In November, another major shareholder of Mobile World, CDH Electric Bee, also sold 3.2 million shares to the Mutual Fund Elite at VND111.000 ($5.2) per unit. CDH Electric Bee, therefore, currently owns 12.23 per cent and Mutual Fund Elite holds 6.88 per cent in Mobile World. The total foreign ownership in Mobile World has now reached 46.45 per cent.
Mobile World has recently issued 5.33 million ESOP shares to around 600 employees to increase its charter capital to almost $52.6 million.
Last year, the mobile device store chain expanded its outlets to 350 nationwide, accounting for a 30 percent market share. With this intermediate step, this year the company strives for the first time touched $1.1 billion in revenue and $41.6 million in net profit, climbing 50 per cent and nearly 32 per cent over 2014, respectively.
Meanwhile, Mekong Capital’s seems to be preparing to add a new potential business to its portfolio, this year. In the coming time, said Mekong Capital CEO Chris Freund, the firm would focus more on the consumer goods sector