Sacom to invest $24.7 mln in new bank

Vietnam telecommunications cable maker Sacom (SAM) plans to invest 400 billion dong ($24.7 million) in a 20-percent stake in a start-up bank, its chief executive said on Thursday.

Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.

"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.

Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.

"The bank operation would rely on these investors with their working capital," Trac said.

When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.

Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.

More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.

Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.

But in recent years it has been seeking to branch out into real estate and telecoms services.

Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.

He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.

VNPT has a stake of about 31 percent in Sacom.

Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.

Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.

Source: Reuters

Military Bank profit at 318 billion VND

The Military Bank has reported a mid-year profit of 318 billion VND (19.9 million USD), while total assets grew 61 percent to 19 trillion VND (1.2 billion USD).

Earnings were helped along by a number of cooperation agreements with large companies including Lilama, Ha Noi Housing Investment and Development and Royal Securities.

The bank hopes to operate 65 branches by the end of the year, up from the current 48 transaction points.

Source: VNA

Banks and funds snap up $31 mln CII bonds

Seven institutional investors including two banks have snapped up the 7-year corporate bonds worth 500 billion dong ($31 million) issued by an investment firm in Ho Chi Minh City, underwriters of the debt said on Friday.

Ho Chi Minh City Infrastructure Investment Co. (CII) sold the July 2014 bonds at an annual coupon of 10.3 percent, underwriters Vietnam International Bank and Vietnam International Securities Company said in a statement.

CII has said it will use proceeds from the issue to finance water supply and bridge construction projects in the city. It did not say if the bonds would be listed on Vietnam's stock market.

Shares in CII were trading down 2.86 percent at 68,000 dong ($4.2) by 0227 GMT on Friday, valuing the firm at around $126 million.

State-run Vietindebank and Saigon Securities (SSI) each bought 100 billion dong worth of the debt.

Other investors included Baoviet Securities (BVS), Prudential Balanced Fund (PRUBF1), Prudential Vietnam Assurance Private Ltd., Hong Kong-based PCA International Funds SPC and unlisted Military Bank that is run by Vietnam's army.

CII invests in urban projects such as roads, bridges, and residential areas. It also provides consultation on financial investment and collects road tolls.

Source: Reuters

Banks and a finance group lend $156 mln for hydroelectricity plant

All four state-owned banking giants in Vietnam and a financial institution have joined hands to provide VND2.5 trillion (US$156 million) for building a hydropower plant in the northern Son La province.

Following credit deals signed Tuesday, the Industrial and Commercial Bank of Vietnam, the Bank for Investment and Development of Vietnam, Asia Commercial Bank, Military Bank and PetroVietnam Finance Co will provide VND1.92 trillion in long-term loans.

The rest will be provided as working capital by the Bank for Foreign Trade of Vietnam.

The Nam Chien Hydroelectricity Plant will be built at a cost of VND4.17 trillion Nam Chien company in Muong La district.

The 200MW plant will be ready by 2009 or 2010 at the latest.

Power demand is increasing by 20 percent a year while the state-run Electricity of Vietnam has said generation will grow by less than 15 percent.

In recent years the government has adopted priority policies to attract investors in the power sector.

The Ministry of Planning and Investment said several mammoth electricity projects involving investments of billions of dollars by foreign companies were awaiting approval.

In the north, the US’s AES and Vietnam Coal and Mineral Industries Group plan to build the 1,200 MW Mong Duong 2 thermal power plant at a cost of $1.4 billion in Quang Ninh province.

While Japan’s Sumitomo Corp., which has more than 25 projects in Vietnam, is planning to build a 2,640 MW, $4 billion power plant in Khanh Hoa province, in central Vietnam.

In the south, the US’s Cannon Group is seeking to build a 1,000 MW power plant in Dong Nai province, while Singapore’s leading power and integrated utilities firm, SembCorp Utilities Pte. Ltd., looks set to invest $500 million to build a 700 MW plant in Ho Chi Minh City.

Power demand in Vietnam's economy, the world's fastest growing after China, is forecast to grow up to 17 percent per year, driving the government to plan the construction of 60 additional plants by 2020.

Source: Thanh Nien

Vietnam's Military Bank sees 2007 assets up 59%

Military Bank, the only bank run by Vietnam's army, expects its total assets to jump 59 percent this year from 2006 to VND21.5 trillion (US$1.3 billion), a bank executive said.

The unlisted bank also hopes to boost its 2007 net profit by 52 percent to VND320 billion ($19.8 million), Chief Executive Le Van Be said in a prospectus seen on Tuesday ahead of a two-stage share sale.

Military Bank will sell 50.2 million new shares to existing shareholders and staff who register by July 16 under the first phase of the issue, Be said.

It will sell a further 45.28 million new shares to strategic foreign and domestic investors in the last quarter of this year, he said, without giving any names of potential buyers. The bank has no foreign investors now.

The Hanoi-based lender reported gross profit for January to May was VND260 billion ($16 million), more than the VND253 billion in gross profit posted for the all of 2006 and 62 percent of this year's annual plan.

Last month it won a license to issue 95.48 million new shares to nearly double its registered capital to VND2 trillion ($124 million), part of which would be sold to foreign investors. It has not announced any plans for an initial public offering (IPO).

Military Bank has more than 4,000 institutional and individual investors, among them the military firm Fly Service Corporation, which owns 14.6 percent. State-run Vietcombank has a 6.5 percent stake.

Its shares fell to VND75,000-76,000 ($4.6-$4.7) each on Monday on the unregulated, unofficial market, from VND86,000-88,000 on June 12 before it secured the license on the new share issue. The latest price valued the bank at $490 million.

Source: Thanh Nien

Strategic partnerships booming

Strategic partnerships have become a popular option for businesses, especially in the volatile circumstances of the growing domestic stock market and growing globalisation.

The most notable agreement is a partnership between PetroVietnam and Lilama in the energy, cement, engineering manufacturing, shipbuilding, transport, real estate, finance and banking sectors. PetroVietnam and Lilama are also considering the possibility of trading shares and sharing investment capital to become founding shareholders.
The Hua Na hydroelectric project is one result of their agreement. The company, with chartered capital of VND1.2tril, was established to own the hydropower plant.

PetroVietnam has already signed a comprehensive agreement with Vietnam Airlines to start an air taxi joint stock company, while Lilama has inked a construction and banking services agreement with Military Bank.

Two State-run groups, Bao Viet and VNPT, recently signed a strategic co-operative agreement where by the former will be responsible for insuring property, equipment, human resource and other VNPT assets, while the latter will become the post and telecom service provider to Bao Viet.

In the distribution sector, the four biggest Vietnamese retailers, Ha Noi Trade Corporation (Hapro), Sai Gon Trade Corporation (Satra); Sai Gon Co-op and Phu Thai Group, have decided to join forces to set up Viet Nam Distribution Association Network (VDA), which is hoped will become the leading distribution and logistics group in Vietnam and will pre-empt and compete effectively with large foreign distributors.

Under its WTO commitments, Vietnam will open its distribution market in 2009. Meanwhile, giant distribution groups are already present in Vietnam, including Metro, Big C and Parkson. In the future Lotte Shopping, Carefour and Wal-mart are expected.

With an investment capital of VND1.5tril ($93.75mil) in the first period of investment (March 2007-October 2008) and VND3-6tril ($187.5-375mil) in the second (November 2008-October 2011), VDA will focus on the development of modern trade centres, supermarkets and hypermarkets, which are planned to control a majority share of the distribution market.

During its debut ceremony, VDA signed three strategic co-operative agreements with Viet Nam National Shipping Lines (Vinalines), Viet Nam Association of Seafood Exporters and Producers (VSAP) and Bank for Investment and Development of Viet Nam (BIDV).

Intel Vietnam has inked a MoU on co-operation with Electricity of Viet Nam (EVN) Group to implement IT solutions in the sector and so strengthen its competitiveness.

However the record to ink strategic agreements must go to Hanaka group joint stock company based in Bac Ninh Province, which has become strategic partners with 10 local and foreign companies such as Japanese Sumitomo, Korean Golden Bridge, Vietcombank and Bach Dang Shipyard.

Source: VNE

Military Bank share issue to raise $59 mln

Vietnam's partly private Military Bank will raise 955 billion dong ($59 million) in a share issue to nearly double its chartered capital to 2 trillion dong ($124 million), the State Securities Commission said on Tuesday.

The unlisted bank based in Hanoi would sell 50,200,000 shares with a face value of 10,000 dong ($0.62) each to existing shareholders and staff in the first phase of the issue, the stock market watchdog said in a statement.

It would sell the remaining 45,280,000 shares to strategic partners in the second phase of an issue which should be completed by Sept. 19, the statement said.

Military Bank, which now has a registered capital of $65 million, is the only lender controlled by Vietnam's army and has more than 4,000 institutional and individual investors. It has not said when it plans to list on the stock market.

Its shares on the unregulated, unofficial markets fell slightly to between 86,000 dong and 88,000 dong ($5.33-$5.46) last week from 88,000-90,000 dong in the first week of June. The latest prices valued the bank at around $570 million.

Military Bank's audited net profit nearly doubled last year to 211.4 billion dong ($13 million) and its assets soared 58% to 13.81 trillion dong ($856.6 million).

The assets had risen another 10% to 15.2 trillion dong ($942 million) at the end of February.

Source: Reuters

Military bonds to hit market

The Hanoi-based Military Commercial Bank has obtained the nod from the central bank to mobilize VND1 trillion ($62 million) through the sale of one million convertible bonds at par at a face value of VND1 million.

The bonds, to be issued in two phases, carry an annual coupon of 8%.

In the first phase 420,000 bonds will be sold to existing shareholders by June 20.

The bonds will be converted into common shares after two years at a 1:1 ratio.

The 580,000 bonds to be sold in the second phase will be converted in 2010 but the schedule is not known.

The bank will use the proceeds from the sale and also issue 954,800 new shares to nearly double its registered capital to VND2 trillion this year.

Military Bank, with more than 4,000 institutional and individual investors, has not said when it plans to list on the stock market.

Its shares gained by 2.3% Friday to VND107,000 on the unofficial market.

The bank's audited net profit figure nearly doubled last year to VND211.4 billion, while total assets jumped 58% to VND13.81 trillion.

Source: Thanh Nien

Petrovietnam and Lilama to build hydroelectric power plant

Two State-owned giants, PetroVietnam and Lilama, will join forces to build the Hua Na hydroelectric facility in the central province of Nghe An, under an agreement signed on May 24.
Hua Na Hydropower Co Ltd will complete the joint venture, which will be formed with total capital of 1.2 trillion VND (75 million USD). PetroViet nam and Lilama shall each hold 14%, with addition stakes held by Military Bank, Sai Gon Securities Incorporation, Sai Gon Commercial Bank, Lilama 10 and Financial Investment and Consulting Co.

The combined facility and reservoir, covering a total area of 20.6sq.km, will be built at a cost of 4.3 trillion VND (270.8 million USD). Construction of the 180MW plant is expected to start in the first quarter of next year, with the plant to go on line in the first quarter of 2011.

Apart from the power project, the new joint venture will outfit other power plant and mining facilities and expand into real estate development.

The Do Luong Cement Plant is one project on the drawing board.

PetroVietnam and Lilama have also agreed to form a stronger strategic partnership. Lilama will become a supplier to Petro Vietnam construction projects, while PetroVietnam will provide financing and insurance services for the projects in which Lilama is a primary investor.

Source: VNA

Vietnam's Military Bank plans bonds issue

Vietnam's Military Commercial Bank will raise 1 trillion dong ($62 million) via the sale of 1 million convertible bonds to boost its finances, the stock market watchdog said.

The Hanoi-based bank was awarded a licence on Friday to sell the three-year bonds in two phases. The bonds will have an annual coupon of 8%, the State Securities Commission said in a statement.

The unlisted bank, Vietnam's 11th-largest lender by assets, will sell 420,000 bonds in the first phase which will be converted into shares under a 1-for-1 scheme in 2009. The 580,000 bonds to be sold in the second phase will be converted into shares in 2010.

Military Bank has not published dates for selling the bonds.

The bank will use proceeds from the bond sale and also issue 954,800 new shares to nearly double its registered capital to 2 trillion dong in 2007, it said in a statement in late April.

The bank, the only lender controlled by Vietnam's army, and the country's more than 30 part-private banks have been raising funds to fuel economic growth projected at 8.5% this year after an 8.17-percent rise in 2006.

Military Bank, with more than 4,000 institutional and individual investors, has not said when it plans to list its shares on the country's stock market .

Its shares have fallen around 12% in the past month to 104,000 dong ($6.46) each this week, on Vietnam's unofficial and unregulated markets, valuing the bank at about $675 million.

The bank's audited net profit nearly doubled the 2005 net figure to 211.4 billion dong last year when total assets soared 58% to 13.81 trillion dong.

The bank's assets have since risen 10% to 15.2 trillion dong as of the end of February.

Source: Reuters