Vietnam Realty Dealbook: Vingroup raises $300m debt; Korean fund eyes CII

Visual from Vingroup's website.

Vingroup, Vietnam’s largest real estate player, has raised a $300-million international syndicated loan. Meanwhile, the Ho Chi Minh City Infrastructure Investment Corp said it was negotiating to secure investment from a South Korean investment fund.

Vingroup gets $300m international syndicated loan

Vietnam’s property major Vingroup has secured another international syndicated loan worth $300 million to finance its real estate developments and to reorganise debt.

Credit Suisse AG was mandated to arrange the loan, which pays a coupon of Libor +5 per cent per annum.

The amortizing loan is implemented as soon as Vingroup completed converting $300 million US dollar-dominated bonds into its shares. With a five-year term and lower interest rate than the previous loans, it will help the company restructure the debt portfolio, Vingroup said.

In 2013, Vingroup got its international syndicated loan debut of $100 million, being the first Vietnamese real estate company so far to manage such financing.

The group was also the first business in Vietnam to sell offshore convertible bonds with a total issuance of $400 million through 2009 and 2012, followed by a $200 million investment by a Warburg Pincus-led consortium in the company’s retail unit in 2013. The deal put Vincom Retail at a $1.1 billion valuation. The global private equity firm then injected $100 million follow-on funding into the firm in 2015.

Meanwhile, recent Vietnamese media reports indicate that Vingroup had acquired a land in western Hanoi from VinaLand Limited, a fund managed by VinaCapital, for $16.2 million. The property, located in the area where Vingroup is developing several projects, will be a high-end mixed-use development.

Also read: Warburg Pincus consortium adds $100m as follow-on investment in Vincom Retail

South Korean fund eyes investment in CII

A South Korean investment fund with $1.2 billion assets under management is exploring options of investing in Ho Chi Minh City Infrastructure Investment Corp (CII), the Vietnamese firm has revealed.

The negotiation between the two parties took place in June, CII said without identifying the Korean investor.

CII has attracted investments from a number of foreign investors. Its strategic partners include Philippines’ Ayala Corporation, Metro Pacific Tollway and Manila Water, Goldman Sachs, Dragon Capital and Vietnam Oman Investment.

Earlier in June, Vietnam-focused investment fund Dragon Capital purchased over 6,500 bonds of CII, which are due to be converted into some 600,000 shares of the company.

In March this year, the construction and realty firm completed the conversion of nearly VND491.3 billion of the first tranche convertible bonds to some 27.3 million shares of CII Bridge & Road to Metro Pacific Tollway. The second tranche, worth VND528.7 billion, will be conducted in September 2016.

Last year, the Filipino company acquired a major minority stake of approximately 45 per cent in the CII subsidiary in a $86.9 million deal through share purchase and bond subscription.

Also read: 

PH tollway firm MPTC completes 45% stake buy in Vietnam’s CII B&R for $86.9m

Vietnam’s CII eases foreign ownership limit; eyes investments from global funds