Vietnam: StanChart PE to occupy a seat on Loc Troi Group’s board

Standard Chartered Private Equity (SCPE) will secure a seat on the board of Vietnam-based agribusiness firm Loc Troi Group, which was the PE investor’s second investment in the Southeast Asian country.

The development was confirmed by Loc Troi, formerly known as An Giang Plant Protection Company, prior to its shareholder meeting on April 28.

SCPE initially injected $90 million for a major minority stake in Loc Troi in 2014, that saw Ho Chi Minh City-based fund manager VinaCapital and a Duxton Asset Management vehicle exit their entire holdings in the company.

In early 2016, the bank’s investment arm sold part of its stake in Loc Troi to Singapore-domiciled company Marina Viet Pte Ltd, reducing its ownership to 11 per cent, according to several Vietnamese media reports.

The agriculture company is also planning to list on the Unlisted Public Company Market (UPCoM), a sub-bourse of the Hanoi Stock Exchange, in the second quarter of 2017.

Originally a state-owned firm founded in 1993, Loc Troi was re-branded from An Giang Plant Protection in 2015. Since its privatisation in 2004, the company had attracted investments from private equity funds but failed to list despite a plan to go public several years ago. After VinaCapital exited Loc Troi to SCPE, other private equity investors that remained invested in Loc Troi include Mekong Capital and PENM Partners.

Mekong Capital’s Vietnam Azalea Fund invested in Loc Troi in 2008 and intends to divest from the company by the end of 2018 as the fund’s active period will terminate by that time. The unit also holds stake in Ho Chi Minh City Stock Exchange-listed pharmaceuticals firm Traphaco.

Chris Freund, Mekong Capital’s founder and partner, said in an email interaction that the fund “fully support their (Loc Troi’s) listing on the UPCOM”.

“It’s very unlikely that we would sell shares of Loc Troi or any listed company via a stock exchange. All of the shares we have sold in the past that were listed companies were put-through transactions in which we negotiated directly with one or several large foreign buyers,” he added.

Loc Troi, which sealed a sustainable agricultural partnership pact with the International Finance Corporation late last year, targets to gain a 31.8 per cent y-o-y rise in net profit to VND460 billion ($20.3 milion) in 2017.

Dividends are expected to be paid in cash at a 30 per cent rate.

Mekong Capital, which raised $112.5 million for its fourth fund, is said to make four new investments in education, transport and retail this year, after announcing to fund pawnshop chain F88.

SCPE scored two private equity deals in 2016, which included a $28 million round co-led with Goldman Sachs in e-wallet operator MoMo, and a $40 million financing in kids entertainment platform N Kid.

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