Vincom Retail, the Vietnamese mall operator backed by Warburg Pincus, is planning a domestic initial public offering that could become the country’s biggest share sale in a decade, people with knowledge of the matter said.
The unit of Vingroup JSC, Vietnam’s largest developer, has selected investment banks to work on the offering and aims to sell shares as soon as this year, according to the people. It aims to raise about $600 million, which may include a sale of existing shares as well as new stock, the people said, asking not to be identified because the information is private.
Vincom Retail is preparing to raise funds as economic growth in Vietnam raises living standards and increases shoppers’ disposable incomes. The benchmark Ho Chi Minh Stock Index this month hit its highest level since 2008, while the Asian Development Bank forecasts the nation’s economy will expand 6.3 percent this year.
A $600 million offering would be the second-largest IPO ever in the country, trailing only the 2007 share sale from Bank for Foreign Trade of Vietnam JSC, according to data compiled by Bloomberg. The last first-time share sale that topped $100 million came from local airline VietJet Aviation JSC, whose shares are up 48 percent since they started trading in February.
The exact size of the Vincom Retail offering hasn’t been set yet, and the timetable for the listing could slip, the people said. Representatives for Vingroup and Warburg Pincus declined to comment.
Warburg Pincus led a consortium that bought a 20 percent stake in Vincom Retail in 2013, in the U.S. private equity firm’s first deal in Vietnam. It completed another $100 million investment two years later. Vincom Retail owns shopping centers including Vincom Mega Mall Royal City and Vincom Mega Mall Times City.
Since Warburg Pincus’s initial investment, Vincom Retail has expanded its portfolio from fewer than 5 properties to around 40 malls totalling 1.1 million square meters, according to the people. It has more than 60 percent market share in the country’s modern retail industry, the people said.
The private equity firm said in 2015 it will commit $125 million toward a venture with PT Nirvana Development that will develop hypermarket-anchored shopping malls in second- and third-tier Indonesian cities. In China, Warburg Pincus has invested in department store chain Intime Retail Group Co. and Red Star Macalline Group Corp., which runs home furnishing centers across the country.
(By Crystal Tse, Cathy Chan, Elffie Chew, and Vinicy Chan)