T&T Group seeks to acquire 25% of Vietnam’s rice exporter Vinafood 2

Vietnam-based multi-sector firm T&T Group plans to spend approximately $56 million to acquire a 25 per cent strategic stake in IPO-bound Vietnam Southern Food Corporation (Vinafood 2).

Vinafood 2 is set to conduct an initial public offering (IPO) on March 14. Despite being a major firm in Vietnam’s agriculture sector, its IPO has not attracted investor attention due to its poor business performance over the past several years, according to experts. In a statement, Vinafood 2 said that T&T Group was the only company to submit a bid to become a strategic investor so far.

Under the equitization approved by Prime Minister, Vinafood 2 will sell nearly 23 per cent of its capital (114.8 million shares) in its IPO, another 25 per cent to strategic investors, and the remainder to its employees and workers at a preferential price.

With the price for the strategic stake sale expected to at least match the IPO starting price of VND10,100 ($0.45) per share, T&T Group may have to pay at least VND1.26 trillion ($56 million) to purchase the 25 per cent stake.

The interest in acquiring a Vinafood 2 stake comes as T&T Group plans to expand its presence in the agricultural sector.

In 2015, T&T Group and Saigon Hanoi Insurance Corporation, both wholly-owned by Chairman Do Quang Hien, acquired 35 per cent of the outstanding shares of Vietnam National Vegetable, Fruit and Agricultural Product Corporation JSC (Vegetexco), marking a foray into the agricultural sector of the multi-sector firm.

T&T also acquired a 50 per cent stake in Ha Noi Import Export and Investment Company (Unimex Hanoi), part of Hanoi Trade Corporation (Hapro), in 2015.

Vinafood 2 is one of the largest rice traders in Vietnam with an annual output of 2.8-3.0 million tons of rice, export turnover of over $1 billion. The agriculture firm is targeting VND11.89 trillion ($523.1 million) net revenue and VND118 billion ($5.19 million) after-tax profit in the first year after equitization.

Its net revenue in 2016 stood at VND9.95 trillion ($437.8 million), down 36 per cent year-on-year. By the end of 2016, the company recorded a net loss of VND798 billion ($35.1 million). By mid-2017, the accumulated loss had increased to VND912 billion ($40.1 million).

T&T Group was established in 1993. It operates in the fields of finance, industry, minerals, real estate and exports.

Also Read:

VN Dealbook: T&T Group to buy more hospitals; Everpia slashes foreign holding limit

Vietnam: T&T Group shores up investment in state companies, eyes real estate assets

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.