Capital management is sweet for Masan

International funds have fuelled Masan’s growth

In 2013 Masan saw long-term investments of about $1.5 billion from high-profile names such as the International Finance Corporation (IFC), KKR & Co. (KKR), J.P. Morgan and TPG Growth. Masan then designated $964 million to general business activities, $174 million to M&A deals and $350 million to balance its books, said a Masan report announced at the group’s annual general meeting in Ho Chi Minh City on April 25.

The meeting approved the multi-business private group’s plans to issue an additional 4.5 million ordinary shares to clear its liabilities as per existing agreements with the IFC, pursuant to a convertible loan extended to Masan by the IFC in 2010, and with MRG, an investment vehicle controlled by the UK’s Mount Kellett Capital, pursuant to a convertible loan extended to Masan by MRG in 2011. The issue is set to begin this year and will run through the first four months of next year.

Masan chairman Nguyen Dang Quang said M&A had played a very important role in the group’s growth momentum. The company acquired leading Vietnamese coffee product maker Vinacafe Bien Hoa, animal feed manufacturer ProConco, and iconic mineral water producer Vinh Hao.

Masan completed an overall business shake-up in 2013 to focus more on the consumption and resources sectors with the hope of higher profits. It expects 2014 revenue to hit at least $1 billion, double that of 2012.

The diversified giant with interests ranging from instant noodles to tungsten mining set up Masan Consumer Holdings to directly control two operating platforms – Masan Consumer and Masan Consumer Ventures. The former continues to serve as the group’s food and non-alcoholic beverage business, while the latter is an incubation platform for high-growth opportunities.

Korean expat Seokhee Won, a former top executive with global giant Unilever, was recently named the new CEO of Masan Consumer and deputy CEO of Masan Group. He is expected to leverage his 22 years experience in the consumer goods industry to help the group achieve its $1 billion plus 2014 revenue target. 

At the general meeting, Dominic Price, former CEO of Indochina and India for J.P. Morgan, was elected as a new member of the board as Madhur Maini decided to step down. Chairman Quang said in another statement, “The arrival of Dominic Price will greatly strengthen Masan’s efforts to implement a corporate governance platform, while the appointment of Seokhee Won is an important part of Masan’s commitment to deliver transformational growth in the consumer sector.”

Last year, J.P. Morgan and its affiliates provided Masan Consumer’s Masan Industrial with a three-year line of credit of up to $175 million. Of this, $150 million is guaranteed by the Multilateral Investment Guarantee Agency (MIGA), a World Bank member. At the time Masan was the first private company in Southeast Asia to secure MIGA support for a corporate finance loan.

Recently, on April 25, MIGA executive vice president Keiko Honda arrived in Vietnam to seek and identify areas where MIGA can help the country mobilise capital for important infrastructure projects and other job-creating enterprises.