Acquiring an existing company is an increasingly attractive investment option for both foreign and domestic investors seeking to increase market share quickly.
ANCO Joint Stock Co, a domestic food and beverage maker, acquired a Nestle milk plant in the town of Ba Vi in Ha Tay Province. The acquisition includes a license to use the Nestle brand name for one year on fresh milk and yogurt products produced by the plant.
Asia Pacific Breweries Ltd, a Singapore-invested firm that owns Viet Nam Brewery Ltd (VBL), similarly expanded its capacity recently by acquiring an 80-per-cent interest in Quang Nam VBL Ltd, while Viettel bypassed the need to develop an outlet network by acquiring Nettra's.
There are a variety of factors that push one company to purchase another. Some takeovers are opportunistic and encouraged by the target company's reasonable price. Or the acquiring company expects to increase its bottom line with the acquisition of the target company.
Other takeovers are considered strategic for the acquiring company to enter into a new market without undue risk or the time and expenses needed to start a new business. The acquiring company may also aim to eliminate or reduce competition.
For the time being, acquisitions also may be the only practical means of doing business in a number of sectors. For example, the Law on Real Estate Transactions, enacted on June 29, 2006, places condition on legal capital with regard to entities wishing to operate in this sector, but the level of legal capital has not been specified. In the meantime, the registration of all real estate businesses are being held up, pending the issuance of a guiding regulation.
A few clever investors, however, have found a way to jump over this obstacle by acquiring an existing company already registered to conduct business in this sector.
Procedures for acquiring a company are specified in the Law on Competition of 2004, Decree No 116/2005/ND-CP of September 15, 2005, and Article 56 of Decree No 108/2006/ND-CP of September 22, 2006, which details and guides implementation of the Law on Investment.
The availability of acquisitions as a doorway into some markets or lines of business has, in turn, spurred the growth of business consulting and auditing services, as well as specialised transaction floors in which companies can offer themselves up for sale via professional brokers.
Established mergers and acquisitions (M&A) law in other countries classifies acquisitions into two types: share purchases, under which the target company itself is acquired, and asset purchases, under which assets of the target company are acquired but not the target company itself.
The laws of Vietnam on M&A, however, are not yet perfected, and even the definition of an acquisition is vague. Article 17.3 of the Law on Competition comes closest, stating: "Acquisition of enterprises refers to an act whereby an enterprise acquires the whole or part of property of another enterprise sufficient to control or dominate all or one of the trades of the acquired enterprise."
Decree No 116/2005/ND-CP defines control or domination to mean that the acquiring company holds more than 50% of voting rights at the general shareholders meeting or on the board of management or otherwise per the charter of the acquired company can control or dominate the financial policies and operations of the acquired company. The law, in other words, has heretofore been silent on the issue of acquisition by means of asset purchase.
Decree No 108/2006/ND-CP sets out some procedures for a foreign investor to obtain official approval of an acquisition. However, the' relationship of this approval process to procedures for obtaining an investment licence are ambiguous.
Whether it can be understood that the procedures to be followed will be those for amending an investment licence isn't entirely clear, however, so some foreign investors may run into a wall when authorised State or local authorities delay approvals of acquisitions while they await guidelines.
Acquisition deals may also be examined with respect to competition rules regarding monopolies or economic concentrations, a process that may be hampered or delayed due to the lack of official data on the market and the market share of enterprises.
Showing posts with label Mergers and Acquisitions. Show all posts
Showing posts with label Mergers and Acquisitions. Show all posts
Wednesday, September 05, 2007
Vinashin inks major deals with Malaysian partners
State-owned Vietnam Shipbuilding Industry Group, or Vinashin, has said it will set up new joint ventures with the Malaysian-based budget airline AirAsia and Lion Group to form a new carrier and build a steel mill in central Vietnam.
A Vinashin official told the Daily that a letter of intent for the establishment of a low-cost carrier in Vietnam was signed between AirAsia and Vinashin Group in the Malaysian capital last Friday.
AirAsia chief executive officer Tony Fernandes and Vinashin chairman and CEO Pham Thanh Binh signed the agreement in the Malaysian capital of Kuala Lumpur, with the participation of Vietnam's Prime Minister Nguyen Tan Dung who was there for the celebration of Malaysia's 50th nationhood.
The airline venture will also make AirAsia the second foreign investor to hold a stake in a Vietnamese airline after Australia's Qantas Airways Ltd., which spent US$50mil acquiring a 30% stake in Pacific Airlines in April this year.
The new carrier, which will be called Vina AirAsia, will initially have a fleet of nine, aircraft with the shipbuilder holding a 70% stake and AirAsia the remaining 30%.
In the letter of intent, AirAsia and Vinashin will establish a joint-venture company with total estimated capital of US$30mil. Both will establish the low-cost airline in Vietnam based on AirAsia's successful business model.
This deal is another move taken by AirAsia to further tap the increasingly lucrative civil aviation market in Vietnam.
The planned venture will include securing a license to operate the new Vietnamese airline to serve domestic, regional and international routes.
According to the letter of intent, Vinashin will help the joint venture secure regulatory approval from the aviation authority as well as concessions, permits, licenses, certificates and any other approval necessary for the working of the new airline.
Meanwhile, AirAsia will help acquire aircraft at the most competitive price and will also provide aviation and other technical expertise, technology transfer in the purchase and leasing of aircraft, engineering and maintenance services, pilot and cabin crew training, and airline marketing, distribution, franchising and branding skills.
Both two sides plan to formally sign a contract on September 20 and Vina AirAsia is planed to begin service in July 2008.
Under Vietnamese law, foreign investors are permitted to own up to 49% of a joint-stock air carrier. Currently, Vietnam is home to three airlines - Vietnam Airlines, Pacific Airlines and Vasco.
AirAsia has been successful in the Hanoi-Bangkok and the Hanoi-Kuala Lumpur services though it only launched the first route in October 2005 and the other in October last year.
The seat occupancy averages 80% for the three daily Hanoi-Bangkok flights and the two daily flights between Hanoi and Kuala Lumpur.
AirAsia is now preparing to begin the service to HCMC, hopefully this year to attract more passengers traveling between Vietnam and the two countries.
"The growth potential in Vietnam's air travel market is significant and we are very excited to be working with a colossal corporation in Vietnam to develop this opportunity," said Fernandes of AirAsia.
"We are very confident that both parties will enjoy not only a productive and profitable outcome together but also the exchange of fresher ideas, skills and technologies."
On the same day, Vinashin signed a deal with Malaysia's Lion Group to build a giant steel mill worth up to US$7.3bil in central Vietnam.
The facility will be built in Ninh Thuan Province to produce eight million tons of steel a year. Investment would be US$2.8bil for the first phase while another US$4.5bil would be spent in the second phase.
The signing of this deal was also witnessed by Prime Minister Dung.
Source: VNE
A Vinashin official told the Daily that a letter of intent for the establishment of a low-cost carrier in Vietnam was signed between AirAsia and Vinashin Group in the Malaysian capital last Friday.
AirAsia chief executive officer Tony Fernandes and Vinashin chairman and CEO Pham Thanh Binh signed the agreement in the Malaysian capital of Kuala Lumpur, with the participation of Vietnam's Prime Minister Nguyen Tan Dung who was there for the celebration of Malaysia's 50th nationhood.
The airline venture will also make AirAsia the second foreign investor to hold a stake in a Vietnamese airline after Australia's Qantas Airways Ltd., which spent US$50mil acquiring a 30% stake in Pacific Airlines in April this year.
The new carrier, which will be called Vina AirAsia, will initially have a fleet of nine, aircraft with the shipbuilder holding a 70% stake and AirAsia the remaining 30%.
In the letter of intent, AirAsia and Vinashin will establish a joint-venture company with total estimated capital of US$30mil. Both will establish the low-cost airline in Vietnam based on AirAsia's successful business model.
This deal is another move taken by AirAsia to further tap the increasingly lucrative civil aviation market in Vietnam.
The planned venture will include securing a license to operate the new Vietnamese airline to serve domestic, regional and international routes.
According to the letter of intent, Vinashin will help the joint venture secure regulatory approval from the aviation authority as well as concessions, permits, licenses, certificates and any other approval necessary for the working of the new airline.
Meanwhile, AirAsia will help acquire aircraft at the most competitive price and will also provide aviation and other technical expertise, technology transfer in the purchase and leasing of aircraft, engineering and maintenance services, pilot and cabin crew training, and airline marketing, distribution, franchising and branding skills.
Both two sides plan to formally sign a contract on September 20 and Vina AirAsia is planed to begin service in July 2008.
Under Vietnamese law, foreign investors are permitted to own up to 49% of a joint-stock air carrier. Currently, Vietnam is home to three airlines - Vietnam Airlines, Pacific Airlines and Vasco.
AirAsia has been successful in the Hanoi-Bangkok and the Hanoi-Kuala Lumpur services though it only launched the first route in October 2005 and the other in October last year.
The seat occupancy averages 80% for the three daily Hanoi-Bangkok flights and the two daily flights between Hanoi and Kuala Lumpur.
AirAsia is now preparing to begin the service to HCMC, hopefully this year to attract more passengers traveling between Vietnam and the two countries.
"The growth potential in Vietnam's air travel market is significant and we are very excited to be working with a colossal corporation in Vietnam to develop this opportunity," said Fernandes of AirAsia.
"We are very confident that both parties will enjoy not only a productive and profitable outcome together but also the exchange of fresher ideas, skills and technologies."
On the same day, Vinashin signed a deal with Malaysia's Lion Group to build a giant steel mill worth up to US$7.3bil in central Vietnam.
The facility will be built in Ninh Thuan Province to produce eight million tons of steel a year. Investment would be US$2.8bil for the first phase while another US$4.5bil would be spent in the second phase.
The signing of this deal was also witnessed by Prime Minister Dung.
Source: VNE
Friday, August 31, 2007
What can big corporations’ cooperation deals bring?
Analysts have been talking about the trend of “brand name trading”. This is when big corporations signs agreements on strategic partnership and cooperation.
A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.
It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.
VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.
The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.
That explains why questions have been raised about the reasons for the partnerships.
VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.
Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.
According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.
Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.
Source: VNE
A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.
It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.
VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.
The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.
That explains why questions have been raised about the reasons for the partnerships.
VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.
Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.
According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.
Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.
Source: VNE
Thursday, August 30, 2007
Kinh Do sees one third '07 profit rise
Vietnam's Kinh Do Food Corporation (KDC) expects its net profit to rise by one third this year and to complete the takeovers of two subsidiaries, including North Kinh Do Food Co (NKD), an executive said on Thursday.
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
Ensuring IP rights, due diligence in an M&A deal
The nation is witnessing an increasing trend towards mergers and acquisitions among both Vietnamese and foreign companies. One of the most important factors in ensuring the success of an M&A deal is for the acquiring company to conduct proper "due diligence," lawyer-speak for the process whereby the potential buyer evaluates the target company and its assets.
While lawyers have long focused due diligence efforts on tangible assets, including land, buildings, and equipment, little attention has been paid to intangible assets, such as intellectual property, which can in some instances be as or more valuable to the company’s operations and profitability.
Due diligence should extend to a wide range of intangible assets related to intellectual property, including business information, employee know-how, licence agreements, marketing and distribution agreements, domain names and even intellectual property which is not legally protectable, e.g., business ideas. Like customer "good will", these types of intangible assets can be important elements of a target enterprise’s value, although evaluation of their worth is not an easy task.
Intellectual property itself is a term that has traditionally referred to copyrights, patents, trademarks and trade secrets. In Viet Nam, the new Intellectual Property Law states that "intellectual property rights are the rights of organisations and individuals to their intellectual property, including copyrights and copyright-related rights, industrial property rights and rights to plant varieties" (Article 4.1). The concept of industrial property is further understood as including industrial designs, utility solutions, layout-designs of semi-conductor integrated circuits, trademarks, trade names, geographical indications, trade secrets, and rights to repression of unfair competition under the IP Law.
Most industrial property objects are only protectable under the IP Law if they are registered with the National Office of Intellectual Property. Well-known trademarks established on the basis of use, however, may be protected independent from registration procedures. However, a claim for protection of a well-known mark is complex, as it is normally made during cancellation or infringement proceedings. Therefore, the protection afforded by registration is more effective in most ordinary cases.
Unlike industrial property objects such as industrial designs and trademarks, objects which are protected by copyright do not need to be registered to afford protection. In this respect, Vietnamese law is consistent with international definitions of copyright which provide that copyright adheres in an original work of authorship published or fixed in a particular medium. Registration of the copyrighted work serves purposes of providing notice and evidence of the copyright.
When conducting due diligence into these types of intangibles, a lawyer must ask two fundamental questions: (1) what are the key rights and intangible assets needed to operate the business successfully? and (2) how can the business be assured the benefits of those rights and assets following the acquisition?
The lawyer then must confirm licences and ownership records, evaluate contracts and licensing agreements, and check for existing litigation and infringement notices.
Issues uncovered in the course of due diligence may significantly alter the terms of an acquisition. For example, if the prospective buyer discovers the target company’s trademark is in use by another firm and rights cannot be secured to the target company, this could lead to significant costs involving re-branding and re-working marketing and promotional materials. Such information, revealed in the course of due diligence, could dramatically affect the target company’s value in the eyes of the prospective investor.
IP rights owned by another division within the target group would also need to be assigned or licensed to the target if the acquiring investor wants to secure these rights. Lawyers conducting due diligence must also ensure target company employees have signed confidentiality agreements and agreed in writing to assign inventions to their employer. This prevents critical copyrights, patents, and trade secrets from leaving the company with departing employees. For instance, a company might sell off a software division, only for the buyer to learn that it owns the copyright in original software but not in any modifications after the developer became an independent contractor.
In addition to ensuring control of IP rights before and during a merger or acquisition, lawyers must also consider what happens after the sale. Following any acquisition, patents will usually need to be re-assigned, licence agreements may need amendment, and notices about the transfer of rights may need to be issued.
Depending on the type of intellectual property, the lawyer must determine whether a particular form of intangible asset is transferable as a matter of contract or under the IP Law. For instance, most industrial property objects such as trademarks, patents, and industrial designs may be transferable, but the moral rights in a copyrighted work cannot be transferred, except under certain circumstances, pursuant to the IP Law.
In short, investigating IP issues in the course of due diligence is of paramount importance during an acquisition. Though often time-consuming and resource-intensive, solid IP due diligence will lessen risk, make valuation more accurate, and give an investor a better understanding of the target company’s business.
Source: VNS
While lawyers have long focused due diligence efforts on tangible assets, including land, buildings, and equipment, little attention has been paid to intangible assets, such as intellectual property, which can in some instances be as or more valuable to the company’s operations and profitability.
Due diligence should extend to a wide range of intangible assets related to intellectual property, including business information, employee know-how, licence agreements, marketing and distribution agreements, domain names and even intellectual property which is not legally protectable, e.g., business ideas. Like customer "good will", these types of intangible assets can be important elements of a target enterprise’s value, although evaluation of their worth is not an easy task.
Intellectual property itself is a term that has traditionally referred to copyrights, patents, trademarks and trade secrets. In Viet Nam, the new Intellectual Property Law states that "intellectual property rights are the rights of organisations and individuals to their intellectual property, including copyrights and copyright-related rights, industrial property rights and rights to plant varieties" (Article 4.1). The concept of industrial property is further understood as including industrial designs, utility solutions, layout-designs of semi-conductor integrated circuits, trademarks, trade names, geographical indications, trade secrets, and rights to repression of unfair competition under the IP Law.
Most industrial property objects are only protectable under the IP Law if they are registered with the National Office of Intellectual Property. Well-known trademarks established on the basis of use, however, may be protected independent from registration procedures. However, a claim for protection of a well-known mark is complex, as it is normally made during cancellation or infringement proceedings. Therefore, the protection afforded by registration is more effective in most ordinary cases.
Unlike industrial property objects such as industrial designs and trademarks, objects which are protected by copyright do not need to be registered to afford protection. In this respect, Vietnamese law is consistent with international definitions of copyright which provide that copyright adheres in an original work of authorship published or fixed in a particular medium. Registration of the copyrighted work serves purposes of providing notice and evidence of the copyright.
When conducting due diligence into these types of intangibles, a lawyer must ask two fundamental questions: (1) what are the key rights and intangible assets needed to operate the business successfully? and (2) how can the business be assured the benefits of those rights and assets following the acquisition?
The lawyer then must confirm licences and ownership records, evaluate contracts and licensing agreements, and check for existing litigation and infringement notices.
Issues uncovered in the course of due diligence may significantly alter the terms of an acquisition. For example, if the prospective buyer discovers the target company’s trademark is in use by another firm and rights cannot be secured to the target company, this could lead to significant costs involving re-branding and re-working marketing and promotional materials. Such information, revealed in the course of due diligence, could dramatically affect the target company’s value in the eyes of the prospective investor.
IP rights owned by another division within the target group would also need to be assigned or licensed to the target if the acquiring investor wants to secure these rights. Lawyers conducting due diligence must also ensure target company employees have signed confidentiality agreements and agreed in writing to assign inventions to their employer. This prevents critical copyrights, patents, and trade secrets from leaving the company with departing employees. For instance, a company might sell off a software division, only for the buyer to learn that it owns the copyright in original software but not in any modifications after the developer became an independent contractor.
In addition to ensuring control of IP rights before and during a merger or acquisition, lawyers must also consider what happens after the sale. Following any acquisition, patents will usually need to be re-assigned, licence agreements may need amendment, and notices about the transfer of rights may need to be issued.
Depending on the type of intellectual property, the lawyer must determine whether a particular form of intangible asset is transferable as a matter of contract or under the IP Law. For instance, most industrial property objects such as trademarks, patents, and industrial designs may be transferable, but the moral rights in a copyrighted work cannot be transferred, except under certain circumstances, pursuant to the IP Law.
In short, investigating IP issues in the course of due diligence is of paramount importance during an acquisition. Though often time-consuming and resource-intensive, solid IP due diligence will lessen risk, make valuation more accurate, and give an investor a better understanding of the target company’s business.
Source: VNS
Friday, August 24, 2007
VNPT signs strategic pact with Vincom
Viet Nam Post and Telecommunications Group (VNPT) and Vincom Joint Stock Company on Aug. 23 signed an agreement making them strategic partners.
The agreement involves closer cooperation between the two companies, so that they will become strategic shareholders and customers of each other’s respective enterprises.
While VNPT will become the main supplier of telecom equipment for Vincom’s real estate projects, Vincom will be awarded VNPT infrastructure development contracts.
“This is a very notable partnership as it will combine the strengths and resources of two of the country’s leading companies,” said VNPT’s vice general director Nguyen Ba Thuoc.
Thuoc stressed that the collaboration between the two large corporations would boost Viet Nam’s economy and the technology sector, in particular, during integration into the World Trade Organisation.
He also said that the collaboration would promote the competitive edge of the two firms on the international market.
Last year, VNPT, the country’s largest telecom service provider, posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.
Real estate developer Vincom ISC generated revenue of 548.4 billion VND (34 million USD) last year, four times higher than the previous year’s figure. Its after-tax profit increased five fold, reaching 343.7 billion VND (21.4 million USD). Vincom, wholly owned by Vietnamese investors, also brings Ha Noi Vincom Tower to the table, among many other properties.
Source: VNA
The agreement involves closer cooperation between the two companies, so that they will become strategic shareholders and customers of each other’s respective enterprises.
While VNPT will become the main supplier of telecom equipment for Vincom’s real estate projects, Vincom will be awarded VNPT infrastructure development contracts.
“This is a very notable partnership as it will combine the strengths and resources of two of the country’s leading companies,” said VNPT’s vice general director Nguyen Ba Thuoc.
Thuoc stressed that the collaboration between the two large corporations would boost Viet Nam’s economy and the technology sector, in particular, during integration into the World Trade Organisation.
He also said that the collaboration would promote the competitive edge of the two firms on the international market.
Last year, VNPT, the country’s largest telecom service provider, posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.
Real estate developer Vincom ISC generated revenue of 548.4 billion VND (34 million USD) last year, four times higher than the previous year’s figure. Its after-tax profit increased five fold, reaching 343.7 billion VND (21.4 million USD). Vincom, wholly owned by Vietnamese investors, also brings Ha Noi Vincom Tower to the table, among many other properties.
Source: VNA
Monday, August 20, 2007
M&A deals booming in stock market age
With the rapid development of the stock market, merger and acquisition (M&A) deals have been booming as enterprises consider this a good way to get bigger.
According to the Ministry of Industry and Trade’s Competition Administration Department (CAD), the value of M&A cases in 2007 may triple 2006. The M&A deals in the first half of the year were worth $626mil, which was double 2006’s value and 15-fold higher than during the same period last year.
The M&A deals were seen not only in domestic owned companies, but in foreign invested enterprises as well. Among the 46 successful deals, there were 16 domestic owned and 30 foreign invested cases. The merged and acquired companies operated in different fields of banking and finance, industrial production, food processing and beverages.
Big M&A deals included Eximbank’s sale of 17.8% of its shares to 16 strategic shareholders worth $248mil. The bank is also going to sell shares to Japan’s Sumitomo.
The second case was the one in which Indochina Capital bought 20% of shares of Hoang Quan Real Estate Joint Stock Company at $20mil, and bought shares of Hoang Quan – Mekong Real Estate Trade and Service Company at $12mil.
People might have heard about the deal in which Japan’s Sojitz purchased 20% of Interflour Vietnam at $80mil to get shares of the second biggest wheat flour company in Vietnam. VinaCapital bought 70% of shares of Omni Saigon Hotel worth $21mil. In April 2007, Anco bought Nestle’s dairy processing workshop in Son Tay. Most recently, in early June 2007, HSBC successfully bought 15% of Techcombank shares, and it is now going to buy another 5%. Deutsche Bank has signed an agreement to purchase 20% of Habubank shares.
The two deals in which Japan’s Daiichi bought Bao Minh CMG and Australia’s Qantas bought 30% of Pacific Airlines were also listed as big deals of 2007. The two deals were not only considered very successful affairs in terms of contract value but also very important in the restructuring of state owned enterprises.
Bui Thanh Nga, Deputy Head of the Legal Department under the State Securities Commission, said that the development of the stock market was the most important factor in the increase of M&A deals. However, she said that Vietnam’s M&A market was now still in an early stage of development.
Source: VNE
According to the Ministry of Industry and Trade’s Competition Administration Department (CAD), the value of M&A cases in 2007 may triple 2006. The M&A deals in the first half of the year were worth $626mil, which was double 2006’s value and 15-fold higher than during the same period last year.
The M&A deals were seen not only in domestic owned companies, but in foreign invested enterprises as well. Among the 46 successful deals, there were 16 domestic owned and 30 foreign invested cases. The merged and acquired companies operated in different fields of banking and finance, industrial production, food processing and beverages.
Big M&A deals included Eximbank’s sale of 17.8% of its shares to 16 strategic shareholders worth $248mil. The bank is also going to sell shares to Japan’s Sumitomo.
The second case was the one in which Indochina Capital bought 20% of shares of Hoang Quan Real Estate Joint Stock Company at $20mil, and bought shares of Hoang Quan – Mekong Real Estate Trade and Service Company at $12mil.
People might have heard about the deal in which Japan’s Sojitz purchased 20% of Interflour Vietnam at $80mil to get shares of the second biggest wheat flour company in Vietnam. VinaCapital bought 70% of shares of Omni Saigon Hotel worth $21mil. In April 2007, Anco bought Nestle’s dairy processing workshop in Son Tay. Most recently, in early June 2007, HSBC successfully bought 15% of Techcombank shares, and it is now going to buy another 5%. Deutsche Bank has signed an agreement to purchase 20% of Habubank shares.
The two deals in which Japan’s Daiichi bought Bao Minh CMG and Australia’s Qantas bought 30% of Pacific Airlines were also listed as big deals of 2007. The two deals were not only considered very successful affairs in terms of contract value but also very important in the restructuring of state owned enterprises.
Bui Thanh Nga, Deputy Head of the Legal Department under the State Securities Commission, said that the development of the stock market was the most important factor in the increase of M&A deals. However, she said that Vietnam’s M&A market was now still in an early stage of development.
Source: VNE
Friday, August 17, 2007
Kinh Do bakery buys stake in Sai Thanh software solutions
Commercial baker Kinh Do (KDC), which is listed on the HCM City stock exchange, has expanded its activities into training by buying a stake in the Sai Thanh Solutions Company (SSC).
KDC chairman Tran Kim Thanh said the company had set up its own training centre but needed a professional consulting and training firm to better satisfy staff and client needs.
KDC has acquired 40 per cent of SSC, which specialises in offering solutions for investment, consultation and training in business and management.
Thanh, who is also chairman of SSC, said: "We want to develop SSC into a strong brand with a focus on improving management skills of corporate senior managers. That’s why we entered a co-operation agreement with Singapore Institute of Management (SIM)."
On Tuesday SSC signed an agreement with SIM for a training programme for senior managers as the first step.
SSC also plans to invest VND100 billion (US$) in developing a modern training centre in District 7 in HCM City.
Source: VNS
KDC chairman Tran Kim Thanh said the company had set up its own training centre but needed a professional consulting and training firm to better satisfy staff and client needs.
KDC has acquired 40 per cent of SSC, which specialises in offering solutions for investment, consultation and training in business and management.
Thanh, who is also chairman of SSC, said: "We want to develop SSC into a strong brand with a focus on improving management skills of corporate senior managers. That’s why we entered a co-operation agreement with Singapore Institute of Management (SIM)."
On Tuesday SSC signed an agreement with SIM for a training programme for senior managers as the first step.
SSC also plans to invest VND100 billion (US$) in developing a modern training centre in District 7 in HCM City.
Source: VNS
Tuesday, August 14, 2007
France Telecom eyes big stake in Vietnam MobiFone
France Telecom aims to buy a large stake in Vietnam's second-largest mobile phone service provider, MobiFone, state media quoted its chief executive as saying.
"We hope to participate with the highest stake possible," France Telecom CEO Didier Lombard was quoted by the Dau Tu (Investment) newspaper on Tuesday as saying.
"Vietnam is a market with potential for growth. Moreover, when we seek the partnership we aim to build a lasting relationship with a long-term vision," Lombard said in his first trip to Vietnam last week.
Mobifone said on Monday it had shortlisted six foreign firms which would bid to advise the state-run company on its partial privatisation, including an IPO expected in 2008.
MobiFone said Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Rothschild and UBS would bid to become the adviser for the Hanoi-based firm. It gave no timeframe for the bidding.
MobiFone, known formally as Vietnam Mobile Telecom Services Company and owned by Vietnam Posts and Telecommunications (VNPT), has said the IPO would take place early next year and VNPT would only hold one-third of the shares in MobiFone.
Strategic shareholders would have one third and outsiders the remaining stake, MobiFone's director Le Ngoc Minh said in May.
Foreign telecom giants including Vodafone and British Telecommunications Plc have said they wanted to be equity partners in the company.
MobiFone uses GSM technology and has about 8.5 million subscribers, or 35 percent share of the domestic market where it competes with military-run Viettel and state-run Vinaphone, which is also controlled by VNPT.
Privatising MobiFone, the first move in restructuring the telecommunications industry, was slow and difficult because Vietnam did not have a legal guide for the process, officials have said.
Source: Reuters
"We hope to participate with the highest stake possible," France Telecom CEO Didier Lombard was quoted by the Dau Tu (Investment) newspaper on Tuesday as saying.
"Vietnam is a market with potential for growth. Moreover, when we seek the partnership we aim to build a lasting relationship with a long-term vision," Lombard said in his first trip to Vietnam last week.
Mobifone said on Monday it had shortlisted six foreign firms which would bid to advise the state-run company on its partial privatisation, including an IPO expected in 2008.
MobiFone said Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Rothschild and UBS would bid to become the adviser for the Hanoi-based firm. It gave no timeframe for the bidding.
MobiFone, known formally as Vietnam Mobile Telecom Services Company and owned by Vietnam Posts and Telecommunications (VNPT), has said the IPO would take place early next year and VNPT would only hold one-third of the shares in MobiFone.
Strategic shareholders would have one third and outsiders the remaining stake, MobiFone's director Le Ngoc Minh said in May.
Foreign telecom giants including Vodafone and British Telecommunications Plc have said they wanted to be equity partners in the company.
MobiFone uses GSM technology and has about 8.5 million subscribers, or 35 percent share of the domestic market where it competes with military-run Viettel and state-run Vinaphone, which is also controlled by VNPT.
Privatising MobiFone, the first move in restructuring the telecommunications industry, was slow and difficult because Vietnam did not have a legal guide for the process, officials have said.
Source: Reuters
Monday, August 13, 2007
Nearly US$40 billion to enter Vietnam
According to the Foreign Investment Agency, there are 48 projects totalling US$39.8 billion waiting to come to Vietnam.
A large part of this huge source of capital will be poured into hi-tech, thermo-power, real estate and steel projects. Specifically, Taiwan’s Foxconn Group will invest $5 billion to build electronic technology parks in several provinces in Vietnam. Pacific Land Limited from Britain plans to invest $1 billion into the Sai Dong A Hi-tech Park in Hanoi.
Real estate and tourism projects account for over $16 billion, equivalent to 40.2% of the total amount of foreign capital that will come to Vietnam.
Switzerland’s Trustee Suisse will join hands with Vietnam’s Vinaconex to build the “Asian pearl” complex and a residential area on Phu Quoc Island, Kien Giang province, with $2.7 billion.
The Kumho Asiana of the Republic of Korea plans to invest $2.5 billion in the Giang Vo cultural-trade centre and the My Dinh exhibition centre in Hanoi.
Foreign investors also are interested in thermo-power plants with six projects totalling $8.5 billion. Japan’s Sumitomo wants to build a 2,640 MW plant in the central province of Khanh Hoa with $3.8 billion. Meanwhile, a joint venture between the US’ AES and the Vietnam Coal and Mineral Group will spend $1.463 billion on a 1,200 MW plant in the northern coastal province of Quang Ninh.
Notably, Chinese investors have expressed interest in building five big works in the fields of thermo-power and real estate. During President Nguyen Minh Triet’s visit to the US last May, the two sides signed memorandums of understanding on these five projects.
Specifically, Vietnam’s An Phu Corporation and Vietnam Shipping Line Corporation (Vinalines) and China’s Chieu Thuong Corporation and Khai Phat Bank will build the An Phu Hung new urban zone in HCM City and Ba Ria-Vung Tau province with $1 billion of capital.
In addition, Chinese investors will pump $650 million in a thermo-power plant in HCM City, a luxurious trading zone and the Ha Long-Mong Cai highway, worth $400 million each.
Source: VNE
A large part of this huge source of capital will be poured into hi-tech, thermo-power, real estate and steel projects. Specifically, Taiwan’s Foxconn Group will invest $5 billion to build electronic technology parks in several provinces in Vietnam. Pacific Land Limited from Britain plans to invest $1 billion into the Sai Dong A Hi-tech Park in Hanoi.
Real estate and tourism projects account for over $16 billion, equivalent to 40.2% of the total amount of foreign capital that will come to Vietnam.
Switzerland’s Trustee Suisse will join hands with Vietnam’s Vinaconex to build the “Asian pearl” complex and a residential area on Phu Quoc Island, Kien Giang province, with $2.7 billion.
The Kumho Asiana of the Republic of Korea plans to invest $2.5 billion in the Giang Vo cultural-trade centre and the My Dinh exhibition centre in Hanoi.
Foreign investors also are interested in thermo-power plants with six projects totalling $8.5 billion. Japan’s Sumitomo wants to build a 2,640 MW plant in the central province of Khanh Hoa with $3.8 billion. Meanwhile, a joint venture between the US’ AES and the Vietnam Coal and Mineral Group will spend $1.463 billion on a 1,200 MW plant in the northern coastal province of Quang Ninh.
Notably, Chinese investors have expressed interest in building five big works in the fields of thermo-power and real estate. During President Nguyen Minh Triet’s visit to the US last May, the two sides signed memorandums of understanding on these five projects.
Specifically, Vietnam’s An Phu Corporation and Vietnam Shipping Line Corporation (Vinalines) and China’s Chieu Thuong Corporation and Khai Phat Bank will build the An Phu Hung new urban zone in HCM City and Ba Ria-Vung Tau province with $1 billion of capital.
In addition, Chinese investors will pump $650 million in a thermo-power plant in HCM City, a luxurious trading zone and the Ha Long-Mong Cai highway, worth $400 million each.
Source: VNE
POSCO plans $4.5 bln-steel mill in Vietnam
POSCO, the world's third-largest steel maker, is seeking approval from the Vietnamese government to build a $4.5 billion steel mill with a local partner, state media reported on Monday.
The Dau Tu (Investment) newspaper quoted a POSCO proposal to the Vietnamese government as saying it would form a venture with dominant state shipbuilder Vinashin in which Vinashin will hold a 30 percent stake in the mill.
The hot-rolled steel mill, located in Van Phong Bay in the south central coastal province of Khanh Hoa, adjacent to a key transhipment port project, will be completed by 2010, the report said.
The group has already started construction of a $1.13 billion cold-rolled steel plant, which is scheduled to begin production in 2009 in the southern coastal province of Ba Ria-Vung Tau.
Source: Reuters
The Dau Tu (Investment) newspaper quoted a POSCO proposal to the Vietnamese government as saying it would form a venture with dominant state shipbuilder Vinashin in which Vinashin will hold a 30 percent stake in the mill.
The hot-rolled steel mill, located in Van Phong Bay in the south central coastal province of Khanh Hoa, adjacent to a key transhipment port project, will be completed by 2010, the report said.
The group has already started construction of a $1.13 billion cold-rolled steel plant, which is scheduled to begin production in 2009 in the southern coastal province of Ba Ria-Vung Tau.
Source: Reuters
Friday, August 10, 2007
Taiwan telco joins forces with Viettel Mobile
Chunghwa Telecom Co. Ltd, a telecom giant in Taiwan, is mulling teaming up with Viettel Mobile to tap the fast-growing Vietnamese market.
The joint venture, which will be capitalized at around US$3.9mil, will first focus on Internet Data Center business and Chunghwa may diversify operations into other service sectors.
Under Vietnamese law, Chunghwa's ownership in the venture will be capped at less than 50%.
An executive from Chunghwa Telecom said the venture, if translated into reality, would be the first overseas telecom investment by Chunghwa and that it showed the growth potential held by the local market where large numbers of Taiwan investors have set up shop.
He said his company had assessed the feasibility of the investment project for nearly a year.
Viettel sent its senior officials to Taiwan last month to work with Chunghwa over the plan.
"At first, we planned to join hands with MobiFone through the acquisition of a 29% stake in it. However, the Vietnamese mobile service provider had not decided when to sell shares to Chunghwa since the two reached an agreement in May this year," he added.
The Taiwan telecom provider opened a representative office in HCMC last year.
Chunghwa Telecom president Shyue-Ching Lu said at the opening ceremony last year that the most important mission of the HCMC office was to boost the company's services for Taiwanese enterprises in Vietnam.
The company wants to strengthen cooperative ties with local telecom service providers, he said.
Under Chunghwa's plan, it has set aside US$181mil for overseas investments this year. It spent about US$36mil in the first six months of this year.
With 4,000 base transceiver stations, 10mil subscribers, the military-owned Viettel is emerging as one of the country's largest mobile service providers.
The firm's market share grew to 35% from 27% in late 2006.
Viettel posted revenue of VND7tril (US$437.5mil) in the first half of the year, equivalent to the amount recorded in all of 2006 or about 23% of the post and telecom sector's total.
Source: VNE
The joint venture, which will be capitalized at around US$3.9mil, will first focus on Internet Data Center business and Chunghwa may diversify operations into other service sectors.
Under Vietnamese law, Chunghwa's ownership in the venture will be capped at less than 50%.
An executive from Chunghwa Telecom said the venture, if translated into reality, would be the first overseas telecom investment by Chunghwa and that it showed the growth potential held by the local market where large numbers of Taiwan investors have set up shop.
He said his company had assessed the feasibility of the investment project for nearly a year.
Viettel sent its senior officials to Taiwan last month to work with Chunghwa over the plan.
"At first, we planned to join hands with MobiFone through the acquisition of a 29% stake in it. However, the Vietnamese mobile service provider had not decided when to sell shares to Chunghwa since the two reached an agreement in May this year," he added.
The Taiwan telecom provider opened a representative office in HCMC last year.
Chunghwa Telecom president Shyue-Ching Lu said at the opening ceremony last year that the most important mission of the HCMC office was to boost the company's services for Taiwanese enterprises in Vietnam.
The company wants to strengthen cooperative ties with local telecom service providers, he said.
Under Chunghwa's plan, it has set aside US$181mil for overseas investments this year. It spent about US$36mil in the first six months of this year.
With 4,000 base transceiver stations, 10mil subscribers, the military-owned Viettel is emerging as one of the country's largest mobile service providers.
The firm's market share grew to 35% from 27% in late 2006.
Viettel posted revenue of VND7tril (US$437.5mil) in the first half of the year, equivalent to the amount recorded in all of 2006 or about 23% of the post and telecom sector's total.
Source: VNE
Wednesday, August 08, 2007
What’s behind the Eximbank-SMBC hand shaking?
In early August 2007, breaking news was announced: Eximbank had chosen Japanese Sumitomo Mitsui Banking Corporation (SMBC), one of the leading banks in the world, as its strategic partner. There are many more things that can be said about the cooperation.
The announcement about the cooperation between Vietnam’s Eximbank and Japan’s Sumitomo Mitsui was the fully satisfactory result of the quiet negotiations between the two sides.
It is clear that Eximbank has made a good deal, since Japanese banks are well known for their cautiousness and conservatism, always taking skeptical steps in doing business, and having perfect risk management skills. Japan is the country with the biggest number of banks in the world. This is the first time a Japanese bank has bought shares of a Vietnamese bank.
If comparing the Eximbank-SMBC deal with the deals of selling shares by other Vietnamese banks to foreign partners, one should see that the selling price of Eximbank proves to be the highest and most beneficial to the local bank in the context of share price slides and decreasing VN Index.
The deal of selling 15% of shares to the Japanese partner can bring Eximbank the huge sum of money of $225mil. The issuance price was 6.42 times higher than the share face value, and 10% lower than the market price at the issuance moment.
Money is not the only thing SMBC can bring to Eximbank. The Japanese bank will also bring support in technologies, and bank governance. In order to bring the support, SMBC will assign a representative to Eximbank, who will join the bank’s management board.
The move by Eximbank of choosing a leading Japanese bank as a strategic shareholder has been highly praised by other local banks, as it was a double move.
The move will allow Eximbank to improve its financial capability and upgrade its management skills. Moreover, it will help the bank better satisfy clients, and Vietnamese enterprises which do business and have relations with Japanese partners. Every one knows that Japan is one of Vietnam’s leading export markets, and one of its biggest trade, investment and tourism partners.
At this moment, Eximbank is also nearly wrapping up the deal on selling 10% of its shares to two foreign investment funds. The said deals would help Eximbank raise its chartered capital from VND2,800bil ($175mil) to VND3,733bil ($233.31mil) in 2007.
The capital surplus Eximbank can get after selling shares to foreign partners may reach VND5,600bil ($350mil). If counting the capital surplus the bank got when selling shares to 17 local partners, estimated at VND3,500bil ($218.75mil), Eximbank would get more than VND9tril ($568mil), enough to become the joint stock bank which has the biggest ownership capital and the bank which has the second biggest chartered capital in Vietnam.
It is expected that in 2008-2010, Eximbank will give dividends to shareholders and divide the fund of capital surplus with the minimum proportion of 35% per annum. By 2010, Eximbank’s chartered capital will reach VND13tril ($812.5mil) at minimum, the level that other banks will find it hard to reach.
With the big ownership and chartered capital, Eximbank will be able to follow its strategy on modernising technologies and initiating other investment plans.
More than one month ago, on June 20, 2007, Eximbank announced it reached an agreement to sell VND500bil of chartered capital to 17 domestic strategic shareholders, which are big economic groups. The selling price was 8-fold higher than the face value, worth VND4tril ($250mil).
The 17 strategic shareholders included big names like Generalexim 1, Asia Commercial Bank, Kinh Do Group and Saigon Trading Corporation.
The said move has also been praised by analysts: while other joint stock banks just have one or two domestic partners, Eximbank has chosen 17 big ones.
Source: VNE
The announcement about the cooperation between Vietnam’s Eximbank and Japan’s Sumitomo Mitsui was the fully satisfactory result of the quiet negotiations between the two sides.
It is clear that Eximbank has made a good deal, since Japanese banks are well known for their cautiousness and conservatism, always taking skeptical steps in doing business, and having perfect risk management skills. Japan is the country with the biggest number of banks in the world. This is the first time a Japanese bank has bought shares of a Vietnamese bank.
If comparing the Eximbank-SMBC deal with the deals of selling shares by other Vietnamese banks to foreign partners, one should see that the selling price of Eximbank proves to be the highest and most beneficial to the local bank in the context of share price slides and decreasing VN Index.
The deal of selling 15% of shares to the Japanese partner can bring Eximbank the huge sum of money of $225mil. The issuance price was 6.42 times higher than the share face value, and 10% lower than the market price at the issuance moment.
Money is not the only thing SMBC can bring to Eximbank. The Japanese bank will also bring support in technologies, and bank governance. In order to bring the support, SMBC will assign a representative to Eximbank, who will join the bank’s management board.
The move by Eximbank of choosing a leading Japanese bank as a strategic shareholder has been highly praised by other local banks, as it was a double move.
The move will allow Eximbank to improve its financial capability and upgrade its management skills. Moreover, it will help the bank better satisfy clients, and Vietnamese enterprises which do business and have relations with Japanese partners. Every one knows that Japan is one of Vietnam’s leading export markets, and one of its biggest trade, investment and tourism partners.
At this moment, Eximbank is also nearly wrapping up the deal on selling 10% of its shares to two foreign investment funds. The said deals would help Eximbank raise its chartered capital from VND2,800bil ($175mil) to VND3,733bil ($233.31mil) in 2007.
The capital surplus Eximbank can get after selling shares to foreign partners may reach VND5,600bil ($350mil). If counting the capital surplus the bank got when selling shares to 17 local partners, estimated at VND3,500bil ($218.75mil), Eximbank would get more than VND9tril ($568mil), enough to become the joint stock bank which has the biggest ownership capital and the bank which has the second biggest chartered capital in Vietnam.
It is expected that in 2008-2010, Eximbank will give dividends to shareholders and divide the fund of capital surplus with the minimum proportion of 35% per annum. By 2010, Eximbank’s chartered capital will reach VND13tril ($812.5mil) at minimum, the level that other banks will find it hard to reach.
With the big ownership and chartered capital, Eximbank will be able to follow its strategy on modernising technologies and initiating other investment plans.
More than one month ago, on June 20, 2007, Eximbank announced it reached an agreement to sell VND500bil of chartered capital to 17 domestic strategic shareholders, which are big economic groups. The selling price was 8-fold higher than the face value, worth VND4tril ($250mil).
The 17 strategic shareholders included big names like Generalexim 1, Asia Commercial Bank, Kinh Do Group and Saigon Trading Corporation.
The said move has also been praised by analysts: while other joint stock banks just have one or two domestic partners, Eximbank has chosen 17 big ones.
Source: VNE
Monday, July 30, 2007
Financial investment: many opportunities, big profit
Aiming to become multi-area financial groups, commercial banks are promoting financial investment services besides their old business fields.
On July 25, the Saigon Thuong Tin Investment Joint Stock Company (SacomInvest) became operational in HCM City with chartered capital of VND300 billion (US$18.75 million). Its founding shareholders are Sacombank, Sacomreal, Toan Thinh Phat, Thanh Thanh Cong, in which Sacombank contributes 11% of capital.
SacomInvest operates in various fields, such as business management consulting, investment project management, real estate business, commercial brokerage, transport work construction, building infrastructure facilities for industrial zones, etc.
With the great financial potentials of its founding shareholders, SacomInvest focuses on infrastructure, energy, and real estate (high-class apartments, offices). The firm also plans to focus on business purchasing, buying the majority of shares of companies that have good foundations but operate ineffectively.
Luong Dinh Quang, Chairman of SacomInvest Board of Directors, said that SacomInvest had bought 40% of the stocks of the Kien Giang Tourism Company, 30% of the Dang Huynh Industrial Zone in the southern province of Long An and had become a strategic shareholder of the Bourbon Gia Lai Sugar Company and Nam Viet Investment Joint Stock Company.
According to Dang Van Thanh, Chairman of Sacombank Board of Directors, the real estate market is getting warmer. The need for housing, workshops, offices for lease is increasing. This is an opportunity for investment companies.
The Bank for Investment and Development of Vietnam (BIDV) has also set up a branch of the BIDV Financial Investment Joint Stock Company in HCM City to expand the company’s operations in the south.
It is easy to see that banks are establishing financial investment companies. Some banks like the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), Sacombank have made joint ventures with some foreign financial institutions to set up securities investment funds.
BIDV has combined with six groups to set up the Industrial and Energy Management Fund Company, which has up to VND10 trillion (US$625 million) of capital. Meanwhile, Southern Bank has negotiated with Amcorp Bhd (Malaysia) to establish financial, insurance, securities trading, fund management companies in Vietnam.
There are many infrastructure investment projects witnessing the participation of banks. The HCM City-Trung Luong-My Thuan-Can Tho highway project has capital of BIDV, the Hanoi-Hai Phong highway, capital from Vietcombank.
According to Tran Phuong Binh, General Director of DongABank, through financial investment, banks can provide services for clients of its partners. For example, DongABank cooperates with water supply companies to gain the payment service for clients of water supply companies. The bank is also ready to loan to clients of water supply companies to install water meters, etc.
Financial investment is now a lucrative area of banks. Of the total VND880 billion ($55 million) of profit so far this year of Asia Commerce Bank (ACB), more than 30% comes from financial investment.
Ly Xuan Hai, General Director of ACB, said that ACB was trying to take advantage of 40% of its chartered capital to bring about big profit for the bank.
In financial investment, ACB divides its capital into two parts: one to buy shares of some companies to become their strategic shareholders and the other to invest in short-term securities. However, financial investment is highly risky so the bank is always very careful in making its portfolio and has to develop a professional risk management system.
Source: VNE
On July 25, the Saigon Thuong Tin Investment Joint Stock Company (SacomInvest) became operational in HCM City with chartered capital of VND300 billion (US$18.75 million). Its founding shareholders are Sacombank, Sacomreal, Toan Thinh Phat, Thanh Thanh Cong, in which Sacombank contributes 11% of capital.
SacomInvest operates in various fields, such as business management consulting, investment project management, real estate business, commercial brokerage, transport work construction, building infrastructure facilities for industrial zones, etc.
With the great financial potentials of its founding shareholders, SacomInvest focuses on infrastructure, energy, and real estate (high-class apartments, offices). The firm also plans to focus on business purchasing, buying the majority of shares of companies that have good foundations but operate ineffectively.
Luong Dinh Quang, Chairman of SacomInvest Board of Directors, said that SacomInvest had bought 40% of the stocks of the Kien Giang Tourism Company, 30% of the Dang Huynh Industrial Zone in the southern province of Long An and had become a strategic shareholder of the Bourbon Gia Lai Sugar Company and Nam Viet Investment Joint Stock Company.
According to Dang Van Thanh, Chairman of Sacombank Board of Directors, the real estate market is getting warmer. The need for housing, workshops, offices for lease is increasing. This is an opportunity for investment companies.
The Bank for Investment and Development of Vietnam (BIDV) has also set up a branch of the BIDV Financial Investment Joint Stock Company in HCM City to expand the company’s operations in the south.
It is easy to see that banks are establishing financial investment companies. Some banks like the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), Sacombank have made joint ventures with some foreign financial institutions to set up securities investment funds.
BIDV has combined with six groups to set up the Industrial and Energy Management Fund Company, which has up to VND10 trillion (US$625 million) of capital. Meanwhile, Southern Bank has negotiated with Amcorp Bhd (Malaysia) to establish financial, insurance, securities trading, fund management companies in Vietnam.
There are many infrastructure investment projects witnessing the participation of banks. The HCM City-Trung Luong-My Thuan-Can Tho highway project has capital of BIDV, the Hanoi-Hai Phong highway, capital from Vietcombank.
According to Tran Phuong Binh, General Director of DongABank, through financial investment, banks can provide services for clients of its partners. For example, DongABank cooperates with water supply companies to gain the payment service for clients of water supply companies. The bank is also ready to loan to clients of water supply companies to install water meters, etc.
Financial investment is now a lucrative area of banks. Of the total VND880 billion ($55 million) of profit so far this year of Asia Commerce Bank (ACB), more than 30% comes from financial investment.
Ly Xuan Hai, General Director of ACB, said that ACB was trying to take advantage of 40% of its chartered capital to bring about big profit for the bank.
In financial investment, ACB divides its capital into two parts: one to buy shares of some companies to become their strategic shareholders and the other to invest in short-term securities. However, financial investment is highly risky so the bank is always very careful in making its portfolio and has to develop a professional risk management system.
Source: VNE
Friday, July 27, 2007
Selling shares to strategic shareholders to be controlled
The Ministry of Finance plans to keep stricter control over the selling of shares to strategic shareholders as it is drafting a document amending several provisions in Circular No 18 on the buying and selling of shares, and the issuance of additional shares by public companies.
If companies sell shares at preferential prices to strategic partners, it is necessary to define who will be listed as ‘strategic shareholders’ after considering the criteria as follows: suppliers of materials for production; big partners who consume products of the companies; partners that have experience in the operation fields of the issuing companies; partners that can help the companies to expand markets and develop production and business; and partners that can give advice in corporate governance and set up strategies.
The management boards of the companies issuing securities must publish the lists of strategic shareholders and the volume of shares to be sold to them and make them public for the review of shareholders. The lists also must be submitted to the State Securities Commission (SSC).
Besides the sale of shares to strategic shareholders, the draft also sets regulations on issuing shares to companies’ labourers under specific programmes, under which the issuance programmes must be approved by shareholders.
The total shares issued under the specific programmes must not be higher than 5% of the total existing shares of the companies. The price of shares to be sold to labourers must not be lower than 40% of the market price at the time of issuance and the price at which shares were sold to existing shareholders.
If companies sell shares at preferential prices to strategic partners, it is necessary to define who will be listed as ‘strategic shareholders’ after considering the criteria as follows: suppliers of materials for production; big partners who consume products of the companies; partners that have experience in the operation fields of the issuing companies; partners that can help the companies to expand markets and develop production and business; and partners that can give advice in corporate governance and set up strategies.
The management boards of the companies issuing securities must publish the lists of strategic shareholders and the volume of shares to be sold to them and make them public for the review of shareholders. The lists also must be submitted to the State Securities Commission (SSC).
Besides the sale of shares to strategic shareholders, the draft also sets regulations on issuing shares to companies’ labourers under specific programmes, under which the issuance programmes must be approved by shareholders.
The total shares issued under the specific programmes must not be higher than 5% of the total existing shares of the companies. The price of shares to be sold to labourers must not be lower than 40% of the market price at the time of issuance and the price at which shares were sold to existing shareholders.
Friday, July 20, 2007
Will foreign banks take further steps?
The trend of selling stakes to foreign bankers, which blossomed 1-2 years ago, now has seemed to subside. Only one successful affair has been reported so far this year.
The deal in which Southern Bank sold 10% of its stakes to Singapore’s UOB in January 2007 was considered the first sale of the year. An ‘engagement’ was made nearly six months later, between Habubank and German Deutsche Bank, but the deal has not been officially inked yet.
An official from the State Bank of Vietnam said that foreign banks had regular meetings and discussions with the central bank every time they planned to buy stakes in local banks. There were many meetings in the past, but very few at this moment. The official said that no official proposal on purchasing stakes in local banks had been made recently.
The agreements signed before by local banks and their partners all contained the provision which said that the foreign partners would raise their ownership ratios to the ceiling level once this was allowed by the central bank. However, as the official said, besides the Hong Kong and Shanghai Banking Corporation HSBC, which has raised their capital contribution ratio in Techcombank to 15% from 10%, no other foreign banker had mentioned the increase of share proportion in local banks. 15% foreign ownership in local banks was approved by the Government in Decree 69 dated in April.
In fact, no official proposal has been made, but local and foreign banks are still discussing issues relating to the selling of stakes to foreign bankers. Luu Duc Khanh, Director General of An Binh Bank, said that the bank was negotiating with four foreign partners, and everything would be concluded in the fourth quarter of the year at the latest.
Pham Van Thiet, Director General of Eximbank, said that the bank would wrap up negotiations this year, after which the bank would sell 15% of its shares (500,000 shares) to foreign strategists.
Director General of Asia Commercial Bank ACB Ly Xuan Hai said that the foreign ownership in ACB had hit the ceiling of 30%. With the current regulations, ACB cannot sell more shares, though foreign bankers still want to buy.
Local bankers said that the ceiling ratio of foreign ownership was a barrier for them and foreign bankers. One of the four partners who sought to buy An Binh’s shares wanted the promise that it would hold up to 30% of the bank’s shares once the Government accepted. However, Mr Khanh said that the bank would only accept the provision if it found a very good partner.
Before the Government promulgated Decree 69, foreign bankers expected that the ceiling ratio for foreign strategic investors would be 30%, while the ratio for all foreign investors would be 49%. However, the ceiling levels have turned out to be 15% and 30% only.
Explaining why foreign bankers were still hesitating to raise their ownership of local banks, Dominic Scriven, Director of Dragon Capital, which now holds shares of many local banks, said that foreign bankers needed some more time to decide whether to inject more money in local banks or set up subsidiaries to develop their own networks.
It is the right time for the foreign banks to consider whether to make further investment or curb investment at the current level. Foreign bankers also need to consider if the mode of cooperation applied in the last time was good for both parties. If everything is okay, they will progress.
Mr Scriven also said that one of the things that made foreign bankers hesitant in stepping forward was the increased value of local banks in the last time.
The value of banks has been overly high, and Dragon Capital will not accept such high prices, he said.
HSBC is the first and only foreign bank that raised its ownership in a local bank after the new decree No 69 came into effect. One year ago, in order to obtain 10% of Techcombank’s shares (the chartered capital was VND580bil, or $36.7mil), HSBC had to pay $17.6mil. However, HSBC had to spend $16.4mil only to buy 5% more of Techcombank shares (VND1,500bil, or $93.1mil), though banks share prices have been skyrocketing so far this year.
Source: VNE
The deal in which Southern Bank sold 10% of its stakes to Singapore’s UOB in January 2007 was considered the first sale of the year. An ‘engagement’ was made nearly six months later, between Habubank and German Deutsche Bank, but the deal has not been officially inked yet.
An official from the State Bank of Vietnam said that foreign banks had regular meetings and discussions with the central bank every time they planned to buy stakes in local banks. There were many meetings in the past, but very few at this moment. The official said that no official proposal on purchasing stakes in local banks had been made recently.
The agreements signed before by local banks and their partners all contained the provision which said that the foreign partners would raise their ownership ratios to the ceiling level once this was allowed by the central bank. However, as the official said, besides the Hong Kong and Shanghai Banking Corporation HSBC, which has raised their capital contribution ratio in Techcombank to 15% from 10%, no other foreign banker had mentioned the increase of share proportion in local banks. 15% foreign ownership in local banks was approved by the Government in Decree 69 dated in April.
In fact, no official proposal has been made, but local and foreign banks are still discussing issues relating to the selling of stakes to foreign bankers. Luu Duc Khanh, Director General of An Binh Bank, said that the bank was negotiating with four foreign partners, and everything would be concluded in the fourth quarter of the year at the latest.
Pham Van Thiet, Director General of Eximbank, said that the bank would wrap up negotiations this year, after which the bank would sell 15% of its shares (500,000 shares) to foreign strategists.
Director General of Asia Commercial Bank ACB Ly Xuan Hai said that the foreign ownership in ACB had hit the ceiling of 30%. With the current regulations, ACB cannot sell more shares, though foreign bankers still want to buy.
Local bankers said that the ceiling ratio of foreign ownership was a barrier for them and foreign bankers. One of the four partners who sought to buy An Binh’s shares wanted the promise that it would hold up to 30% of the bank’s shares once the Government accepted. However, Mr Khanh said that the bank would only accept the provision if it found a very good partner.
Before the Government promulgated Decree 69, foreign bankers expected that the ceiling ratio for foreign strategic investors would be 30%, while the ratio for all foreign investors would be 49%. However, the ceiling levels have turned out to be 15% and 30% only.
Explaining why foreign bankers were still hesitating to raise their ownership of local banks, Dominic Scriven, Director of Dragon Capital, which now holds shares of many local banks, said that foreign bankers needed some more time to decide whether to inject more money in local banks or set up subsidiaries to develop their own networks.
It is the right time for the foreign banks to consider whether to make further investment or curb investment at the current level. Foreign bankers also need to consider if the mode of cooperation applied in the last time was good for both parties. If everything is okay, they will progress.
Mr Scriven also said that one of the things that made foreign bankers hesitant in stepping forward was the increased value of local banks in the last time.
The value of banks has been overly high, and Dragon Capital will not accept such high prices, he said.
HSBC is the first and only foreign bank that raised its ownership in a local bank after the new decree No 69 came into effect. One year ago, in order to obtain 10% of Techcombank’s shares (the chartered capital was VND580bil, or $36.7mil), HSBC had to pay $17.6mil. However, HSBC had to spend $16.4mil only to buy 5% more of Techcombank shares (VND1,500bil, or $93.1mil), though banks share prices have been skyrocketing so far this year.
Source: VNE
Wednesday, July 18, 2007
M&A trend arouses monopoly fears
Economists are concerned that the growing number of merges and acquisitions (M&A) - the latest trend in the market as smaller companies learn to be lean and mean - will progress unabated, giving way to monopolies and anti-competitive behaviour.
According to First Asia Finance Group, a Hong Kong based financial advisor, more than half of the roughly 300,000 small and medium-sized enterprises (SMEs) currently in the market will either close or merge with other companies over the next six years due to stronger competition and the rich environment for M&A activity.
There have already been some major deals signed this year. The Dai-ichi Group acquired Bao Minh-CMG Life Insurance in a coup de main to quickly breach the Vietnamese market.
In addition, VinaCapital purchased a 70 per cent stake in both the Metropole Hotel and the Sai Gon Ommi earlier this year through its VinaLand fund. Executives say the fund is hunting for other high-end hotels to buy.
Don Lam, director of VinaCapital, said the recent wave of M&A in Viet Nam may be a necessary step to improve the efficiency of many poorly run companies and create better economies of scale.
M&A could also lead to improved brand recognition on a national and international scale, say experts, as companies use their combined strengths to reach more consumers.
"Mergers and acquisitions has also proven to be a new and important channel to attract foreign investment," said Nguyen Thi Bich Van, deputy director of the Ministry of Planning and Investment’s Foreign Investment Agency.
There are concerns, though, that if left unchecked M&A activity could lead to anti-competitive behaviour and the emergence of monopolies.
Legal regulations to ensure competition should, therefore, be streamlined, especially as Viet Nam opens its market under the WTO agreement to well-funded multinational corporations, says Nguyen Nhu Phat, deputy chairman of the State and Law Institute.
M&A activity is currently regulated under several laws - the Investment Law, Enterprise Law and Securities Law - which causes regulatory overlaps.
The Ministry of Trade’s Competition Administration Department will have to take a bigger role in preventing unwanted monopolies, says Phat. He also worries that regulators may be restricted given the department has three roles: administrator, investigator and executor.
Dinh Thi My Loan, director of the Competition Administration Department, says there are plans to streamline regulatory procedures for mergers and acquisitions. The department, though, will have to co-operate closely with the State Securities Commission, the Ministry of Planning and Investment.
Source: VNS
According to First Asia Finance Group, a Hong Kong based financial advisor, more than half of the roughly 300,000 small and medium-sized enterprises (SMEs) currently in the market will either close or merge with other companies over the next six years due to stronger competition and the rich environment for M&A activity.
There have already been some major deals signed this year. The Dai-ichi Group acquired Bao Minh-CMG Life Insurance in a coup de main to quickly breach the Vietnamese market.
In addition, VinaCapital purchased a 70 per cent stake in both the Metropole Hotel and the Sai Gon Ommi earlier this year through its VinaLand fund. Executives say the fund is hunting for other high-end hotels to buy.
Don Lam, director of VinaCapital, said the recent wave of M&A in Viet Nam may be a necessary step to improve the efficiency of many poorly run companies and create better economies of scale.
M&A could also lead to improved brand recognition on a national and international scale, say experts, as companies use their combined strengths to reach more consumers.
"Mergers and acquisitions has also proven to be a new and important channel to attract foreign investment," said Nguyen Thi Bich Van, deputy director of the Ministry of Planning and Investment’s Foreign Investment Agency.
There are concerns, though, that if left unchecked M&A activity could lead to anti-competitive behaviour and the emergence of monopolies.
Legal regulations to ensure competition should, therefore, be streamlined, especially as Viet Nam opens its market under the WTO agreement to well-funded multinational corporations, says Nguyen Nhu Phat, deputy chairman of the State and Law Institute.
M&A activity is currently regulated under several laws - the Investment Law, Enterprise Law and Securities Law - which causes regulatory overlaps.
The Ministry of Trade’s Competition Administration Department will have to take a bigger role in preventing unwanted monopolies, says Phat. He also worries that regulators may be restricted given the department has three roles: administrator, investigator and executor.
Dinh Thi My Loan, director of the Competition Administration Department, says there are plans to streamline regulatory procedures for mergers and acquisitions. The department, though, will have to co-operate closely with the State Securities Commission, the Ministry of Planning and Investment.
Source: VNS
Friday, July 13, 2007
Mergers & Acquisition: many problems remain
There were 18 mergers and acquitisition (M&A) cases in Vietnam in 2005 totalling US$61 million. The figure rose to 32 M&A in 2006, with a total value of $245 million.
M&A is a very important form of foreign direct investment (FDI). For Vietnam, M&A activities have been performed but it is still a new form of business. Thus, research and seeking solutions for promoting M&A will contribute to create a new and important FDI attraction channel in Vietnam in the coming time, said Nguyen Thi Bich Van, Deputy Head of the Foreign Investment Agency under the Ministry of Planning and Investment.
In the past ten years, these activities have developed robustly and created a fever in many developed and developing countries. FDI performed in the form of M&A accounts for 57%-80% of the total FDI in the world.
According to PricewaterhouseCoopers, there were 18 M&A in Vietnam in 2005 with a total value of 61 million. The figure was nearly double in 2006, 32, valued at $245 million.
“This year and in the next few years, M&A operations will develop quickly in Vietnam, especially in the fields of banking, financial services, consumer goods, textile-garment products and retailing,” said Bui Van Tuynh, General Director of the Dai Viet Securities Joint Stock Company (DVSC).
According to some economic experts, the trend of forming multi-area groups or cross investment in the form of becoming strategic shareholders is one way of economic concentration and this will facilitate M&A activities.
According to Mr. Bui Van Tuynh, some companies conducted M&A some years ago, but this was not true M&A because those cases were done under the recommendation of management agencies.
It was not until the Foreign Investment Law 2005 took effect that M&A was really able to assume its true nature. Many transactions have been conducted successfully, for example the affairs between Campina milk group of the Netherlands and the Vietnam Dairy Products JS Company, Japan’s Daii insurance group and Bao Minh CMG.
However, along with the development of M&A, the ineffectiveness of the Investment Law 2005, Enterprise Law 2005, the Securities Law 2006 and the differences in those laws have hindered M&A operations.
Many problems associated with M&A have been mentioned and Vietnamese companies have asked the government to consider dealing with those problems soon to promote M&A.
“According to international experience, M&A is an important factor for economic development, helping local firms access technology, management, skills on market and exports. So we need a clear, sufficient legal corridor as the foundation for M&A activities, to restrict economic concentration and unhealthy competition,” said Mr. Tuynh.
Source: VNE
M&A is a very important form of foreign direct investment (FDI). For Vietnam, M&A activities have been performed but it is still a new form of business. Thus, research and seeking solutions for promoting M&A will contribute to create a new and important FDI attraction channel in Vietnam in the coming time, said Nguyen Thi Bich Van, Deputy Head of the Foreign Investment Agency under the Ministry of Planning and Investment.
In the past ten years, these activities have developed robustly and created a fever in many developed and developing countries. FDI performed in the form of M&A accounts for 57%-80% of the total FDI in the world.
According to PricewaterhouseCoopers, there were 18 M&A in Vietnam in 2005 with a total value of 61 million. The figure was nearly double in 2006, 32, valued at $245 million.
“This year and in the next few years, M&A operations will develop quickly in Vietnam, especially in the fields of banking, financial services, consumer goods, textile-garment products and retailing,” said Bui Van Tuynh, General Director of the Dai Viet Securities Joint Stock Company (DVSC).
According to some economic experts, the trend of forming multi-area groups or cross investment in the form of becoming strategic shareholders is one way of economic concentration and this will facilitate M&A activities.
According to Mr. Bui Van Tuynh, some companies conducted M&A some years ago, but this was not true M&A because those cases were done under the recommendation of management agencies.
It was not until the Foreign Investment Law 2005 took effect that M&A was really able to assume its true nature. Many transactions have been conducted successfully, for example the affairs between Campina milk group of the Netherlands and the Vietnam Dairy Products JS Company, Japan’s Daii insurance group and Bao Minh CMG.
However, along with the development of M&A, the ineffectiveness of the Investment Law 2005, Enterprise Law 2005, the Securities Law 2006 and the differences in those laws have hindered M&A operations.
Many problems associated with M&A have been mentioned and Vietnamese companies have asked the government to consider dealing with those problems soon to promote M&A.
“According to international experience, M&A is an important factor for economic development, helping local firms access technology, management, skills on market and exports. So we need a clear, sufficient legal corridor as the foundation for M&A activities, to restrict economic concentration and unhealthy competition,” said Mr. Tuynh.
Source: VNE
Wednesday, July 11, 2007
New decree on acquisition of SoEs in the pipeline
Foreign investors will be allowed to buy parts of or whole enterprises whose charter capital are owned by the State provided that these enterprises are working the fields that are fully open to foreign investors, says a draft decree.
The draft decree on merge and acquisition of State-owned enterprises has won support from enterprises’ managers and representatives. It is expected to replace the current Government’s Decree No. 80.
The draft decree stipulated that State-owned enterprises will be auctioned or sold under direct agreements. The acquisition will be fully covered by mass media.
It offers equal opportunities to both domestic and foreign investors, including individuals and businesses, in acquiring State-owned enterprises.
Under the regulation, not only State-owned enterprises and affiliates of State-owned corporations but also sections or the whole of one-member ltd companies owned by the State will be put for sale.
However, enterprises that are permitted to be sold and the rights of workers to buy their enterprises remains big concerns of relevant parties.
Rearrangement of State-owned enterprises is the Government’s major programme to change the management method and bring into play the strength of these enterprises.
Enterprises covered by the decree will include those operating in power, telecom, marine transportation, oil and gas, finance and insurance.
Source: VNA
Monday, July 09, 2007
Shinhan Bank says interested in Vietcombank shares
Shinhan Bank, a unit of South Korea's Shinhan Financial Group, said on Monday it is interested in buying shares in Vietcombank of Vietnam, which plans to go public either this month or in August.
Shinhan, having completed its $7.2 billion acquisition of the country's top credit card firm LG Card in 2006, is among the South Korean banks that have been eyeing Vietnam and other parts of Asia to make up for slow domestic loan growth.
Shinhan has already set up a joint venture with Vietcombank in Vietnam.
"We are interested in the IPO of Vietcombank," said Shinhan Bank spokesman Yoon Yong-jin. "But nothing has been decided in detail."
The Maeil Business Newspaper reported on Monday, without citing a source, that Shinhan was seeking to buy a 4 percent stake in the Vietnamese bank for about $100 million, making it one of the biggest overseas investments by a South Korean bank.
State-run Vietcombank, with assets of $10.7 billion and 68 branches nationwide, accounts for 10.5 percent of the country's market lending and handled 24 percent of its trade payments.
South Korean financial services companies are keen on buying shares in Vietnamese counterparts through their public offerings.
Industrial Bank of Korea is also moving to buy a stake in a leading Vietnamese bank, a senior official told Reuters in May.
Last week, South Korean brokerage Bridge Securities Co. Ltd. said it would buy 20 percent of Vietnam's Hai Phong Securities Co. (HPC) for $13 million.
Source: Reuters
Shinhan, having completed its $7.2 billion acquisition of the country's top credit card firm LG Card in 2006, is among the South Korean banks that have been eyeing Vietnam and other parts of Asia to make up for slow domestic loan growth.
Shinhan has already set up a joint venture with Vietcombank in Vietnam.
"We are interested in the IPO of Vietcombank," said Shinhan Bank spokesman Yoon Yong-jin. "But nothing has been decided in detail."
The Maeil Business Newspaper reported on Monday, without citing a source, that Shinhan was seeking to buy a 4 percent stake in the Vietnamese bank for about $100 million, making it one of the biggest overseas investments by a South Korean bank.
State-run Vietcombank, with assets of $10.7 billion and 68 branches nationwide, accounts for 10.5 percent of the country's market lending and handled 24 percent of its trade payments.
South Korean financial services companies are keen on buying shares in Vietnamese counterparts through their public offerings.
Industrial Bank of Korea is also moving to buy a stake in a leading Vietnamese bank, a senior official told Reuters in May.
Last week, South Korean brokerage Bridge Securities Co. Ltd. said it would buy 20 percent of Vietnam's Hai Phong Securities Co. (HPC) for $13 million.
Source: Reuters
Subscribe to:
Posts (Atom)
