South Korea’s SK Group picks up 6% stake in Vingroup for $1b

Vietnamese diversified conglomerate Vingroup on Thursday announced securing a $1-billion investment from South Korean chaebol SK Group.

According to the announcement, SK Group has agreed to purchase 154.3 million shares of Vingroup through a private placement, and 51.4 million shares of its VinCommerce unit at VND 113,000 ($4.9) apiece.

Based on the current outstanding shares of Vingroup, the stake acquired by SK works out to be around 6 per cent.

Following the stake acquisition, SK Group will become the largest overseas shareholder in Vingroup. The two companies said they will explore joint strategic investments in Vietnam and the region.

“We believe partnering with a local champion, such as Vingroup, to explore new business opportunities is an ideal strategy for SK’s expansion in Southeast Asia. Further, we are expanding in Vietnam with a long term goal of contributing to the local agenda and the economic advancement of the nation,” said Woncheol Park, representative director of SK Southeast Asia Investment.

SK had last year injected $470 million in Masan Group, a Vietnamese conglomerate operating in consumer goods, agriculture, minerals and financial services.

“We believe that with SK’s deep-benched experience as a leader in many of its businesses, its solid business foundation and achievements in technology, SK will bring about invaluable experience which will enable Vingroup to achieve new heights, especially in the fields of industrials and technology,” said Nguyen Viet Quang, vice chairman and CEO of Vingroup.

Vingroup stock price jumped 1.4 per cent during trading hours on Thursday to VND 116,900 per share, giving the company a market cap of more than $16.2 billion.

Vingroup has previously raised $400 million from Hanwha Asset Management in 2018. Its subsidiaries Vincom Retail and Vinhomes have also attracted major global investors such as Warburg Pincus and GIC, and have created blockbuster IPOs in the local stock market.