VinaLand Ltd, which is VinaCapital‘s Cayman Island incorporated real estate investment fund, divested its 55 per cent stake in the Vung Bau project, this month. The project is located in Phu Quoc island in the southern Kien Giang province of Vietnam.
The project site was acquired by the London Stock Exchange listed investment vehicle in 2008. “However, due to market conditions, the company did not proceed with the originally intended development,” it said in a recent report.
The divestment of this parcel of land is consistent with the limited liability fund’s strategy to divest from a number of projects by the end of the current term.
As a result of the transaction, VinaLand sold its entire 55 per cent holding in the project, at a valuation 2.9 per cent above the unaudited 31 December 2014 net asset value (NAV) of the investment, and 1.6 per cent above the NAV at the time of VinaLand’s extraordinary meeting in November 2012, when its shareholders agreed to extend a three year term to implement the divestment (while executing no new deals).
This transaction has resulted in net proceeds of $4.7 million for the company, which said that it has collected the money. A par of this fund will be used to cover capital commitments and operating costs, while the remaining will be deployed towards a share buyback program, said the company
“Entering the final year of the three-year cash return period, which began after extraordinary general meeting held on 21 November 2012, the board and the investment manager remain committed to divesting assets and returning capital to shareholders,” VinaLand chairman Michel Casselman wrote in statement last month.
He added that sourcing buyers for the fund’s assets remained challenging despite some improvement in the Vietnamese real estate sector. “Subsequently we are currently behind our divestment target and are using all the resources available to us to close some larger transactions between now and the end of 2015.”
VinaLand was established with a primary objective to focus on key growth segments of residential, office, retail, industrial and leisure real estate projects in Vietnam and the surrounding countries in Asia.
VinaCapital, the mother company of VinaLand, possesses a diversified portfolio of $1.5 billion in assets under management. Along with VinaLand, its is operating two other funds that are traded on the London Stock Exchange’s Alternative Invesement Market: the Vietnam Opportunity Fund Ltd and the Vietnam Infrastructure Ltd.