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

A design of T&T Group's realty project. Visual from the company's website.

T&T Group, a multi-industry investment firm run by businessman Do Quang Hien, is emerging as one of the most active private companies to invest in Vietnam state assets.

Locally regarded as a football tycoon, Hien’s T&T Group is involved in diversified businesses like real estate, finance, electronics and agriculture.

Earlier this year, the company proposed to bid for the Phu Quoc International Airport, boding well for a schedule of expansion throughout 2015, which has seen T&T Group aggressively acquire state-owned businesses in different industries.

Related story: T&T Group wants to buy Phu Quoc Airport

Initially launched as an electronics company, selling products of well-known international brands and importing cheap motorbikes from China, which used to create a buzz in the local market in the 90s, T&T Group was only widely known when Hien ventured in the football business.

Having gained the renown, Hien started to ramp up investments in real estates and finance. In 2007, Hien purchased stakes at Saigon Hanoi Bank and became its chairman. T&T Group is currently the largest shareholder at the lender by 11.7 per cent. It was the base for later-on alliance in establishing the bank’s securities and consumer financial arms.

In addition, T&T Group also formed partnership with the local mining giant Vinacomin to set up SHB-Vinacomin Insurance Company.

In the real estate sector, it is a major shareholder at T&T Land JSC, Best&T Urban Investment JSC and T&T-MKC House and Urban Area Development JSC.

However, the investments in banking and properties did not pay off. At least two of its realty projects are on the verge of being terminated, according to local media reports. Meanwhile, Saigon Hanoi Bank’s bad debt ratio has been among the top of the market, and the stock price has been below par for four years.

That might be the reason behind Hien’s recent moves to look at the state sector, with a spate of state-owned companies being equitised and the government calling for private resources to develop public infrastructure.

Most recently on October 24, the Hanoi Stock Exchange announced that T&T Group will be the strategic investor, holding 50 per cent equity, of Unimex Hanoi. An IPO plan has been mapped out for Unimex Hanoi, which will see the state retain an ownership of 20 per cent, and 28 per cent sold to general investors.

A subsidiary of the Hanoi Trade Corporation, Unimex Hanoi mainly deals with agricultural products. Similar to other investment portfolios of T&T Group, Unimex Hanoi owns premium land areas in big cities like Hanoi, Hai Phong and Ho Chi Minh City. In the end, it all comes back to real estate properties. This year, Unimex Hanoi has sold 5.26 per cent of the Metropole Hanoi Hotel to Hanoitourist Corporation for $3.24 million, recording a profit of $2.24 million.

Other major investments of T&T Group in 2015 include 98 per cent of Quang Ninh Port, 60 per cent of the Vietnam National Vegetable, Fruit and Agricultural Product Corporation and 51 per cent (not 30 per cent as per the IPO plan) of the Vietnam Central Transportation Hospital. Take a look:

Vietnam Central Transportation Hospital: On October 21, the first local hospital to be equitised successfully sold nearly 30 per cent during its IPO auction. It raised VND116.8 billion ($5.2 million), which means investors bought the shares at the average price of nearly VND23,600. Notably, there was an investor who had filed to purchase a large amount at VND26,000 apiece. The Tien Phong (Pioneer) cited its trusted source that the investor who paid that price at the auction, to purchase 21 per cent of the hospital, was T&T Group, which had been previously entitled with a 30 per cent ownership. Thus, T&T Group has garnered the controlling stake at the healthcare facility.

According to the IPO plan, the hospital’s charter capital will jump to VND435.5 billion from the current VND168 billion, once the new seven-storey building – invested by the state budget – is finished, and its value is financially recorded. By then, the state holding will increase to around 73 per cent, and Vietnam will again reduce its involvement in the hospital to 30 per cent.

Related story: Vietnam’s first equitised hospital raises $5.2m through IPO

Vietnam National Vegetable, Fruit and Agricultural Product Corporation (Vegetexco): In September, T&T Group and two other companies under the same umbrella of Hien acquired a combined 60 per cent stake of Vegetexco following its IPO, which saw the Vietnamese government fully cash out. If healthcare is the realm that T&T Group has never put its foot into, the company has been trading agricultural and food products such as rubber, pangasius, cassava and livestock feed.

Industry insiders also allege that T&T Group is eyeing property assets of Vegetexco. The latter will soon commence renovating its headquarters at Hanoi’s central Hoan Kiem District into a hotel, anticipating to invest VND38.8 billion in this project. Meanwhile, it is also planning to invest VND278 billion in two commercial and residential complexes in the city.

Related story: Businessman Do Quang Hien acquires Vegetexco Vietnam

Quang Ninh Port: In April this year, the Vietnam National Shipping Lines started to sell 98 per cent of the northern port to T&T Group. The procedures were finalised by August, and executives from Hien’s company got on board with Quang Ninh Port, including the chairing position.

By having a footprint in the port infrastructure sector, T&T Group is going on the path that Vingroup – Vietnam’s leading property developer – wants to follow. Vingroup said it was keen on up to 80 per cent each in the country’s two largest ports, Hai Phong and Saigon. However, Vingroup gave up its own bid for Saigon Port prior to its IPO in June. Post the IPO, Vietinbank is holding 9.07 per cent, while Vietnam Prosperity Bank (VPBank) is holding 7.44 per cent of the southern port company. Meanwhile, the port said it will forge a joint venture with Vingroup to roll out an upgrading project.

Related stories:

Vietnam’s T&T Group completes acquisition of Quang Ninh Port

Vietnam realty major Vingroup eyes stake in Saigon & Hai Phong Ports

Vingroup drops bid for controlling stake in Saigon Port

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. 
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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.