Vietnam’s Vingroup raises $1.3b from GIC via stake sale in units, loan

The latest Vincom-branded shopping mall in Hanoi.

Vietnam’s biggest property developer Vingroup has raised $1.3 billion from Singapore’s wealth fund GIC by selling a stake in two units and through a loan.

One of the units involved is IPO-bound Vinhomes, the luxury villa and serviced apartment development arm of Vingroup, the Vietnamese realty giant said in a statement.

The capital raised will be used to fund the units’ projects, Vingroup said in its statement.

Vinhomes registered to list nearly 2.7 billion shares on the Ho Chi Minh City Stock Exchange (HoSE) earlier this month. In a disclosure to HoSE, the realty developer announced it has a charter capital of VND26.79 trillion ($1.17 billion). Vingroup currently owns 69.67 per cent of Vinhomes’ charter capital.

Vingoup in February said that it is planning a spinoff of its luxury residential arm that could raise as much as $1 billion. That target has now been doubled, with Vingroup seeking to raise as much as $2 billion via a share sale. If successful, it would mark the biggest ever first-time share sale in Vietnam, according to Bloomberg data.

The IPO of Vinhomes would follow last year’s listing of Warburg Pincus-backed Vincom Retail JSC, Vietnam’s biggest shopping mall operator and also a unit of Vingroup, which raised roughly $708 million. GIC had also participated in Vincom’s IPO.

Singapore-based sovereign wealth fund GIC is one of the largest financial investors in Vietnam’s capital market with investments in big companies such as Masan Group, Vietjet Air, Vinamilk, FPT, PAN Group and Vinasun.

The participation of Singapore sovereign wealth fund GIC and Franklin Templeton in Vincom Retail’s IPO has attracted other global investors to the country, bankers and lawyers said.

According to the consolidated financial statement for the fourth quarter of 2017, Vingroup’s total consolidated revenue reached VND90.3 trillion ($3.9 billion) in 2017, up 56.8 per cent compared to 2016. The group’s pre-tax profit stood at VND8.9 trillion ($390 million), up 53.9 per cent from a year ago.

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