REE and Vingroup acquire Vinaconex subsidiary in $50-million deal

December 04, 2017 | 21:41

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Refrigeration Electrical Engineering Corporation (REE) and Sinh Thai LLC—a 100-per-cent-owned subsidiary of Vingroup—spent VND1.07 trillion ($47.1 million) acquiring 25.5 million shares, or 51 per cent stake, in Vinaconex Water Supply JSC (Viwasupco) from Vinaconex.

Vingroup will need to assist in handing over Song Da water project-phase II to Vinaconex

Vinaconex JSC (Vinaconex) today officially announced the plan to divest its entire 25.5-million shareholding in Viwasupco through an auction. As the result, Sinh Thai LLC bought 17.3 million shares and REE 8.2 million shares at the price of VND39,904 ($1.76) apiece. After the purchase, Sinh Thai LLC and REE increased their holdings in Viwasupco to 50.4 and 34.7 per cent, respectively.

According to the commitments in the sales contract, REE and Sinh Thai LLC will have to support Viwasupco’s handing over Song Da water project-phase II to Vinaconex.

Previously, Viwasupco completed the construction and put Song Da water project-phase I into operation with a capacity of 300,000 cubic metres per day. The second phase is expected to increase this to 600,000 cubic metres per day.

This is not the first time that Vinaconex has attempted to divest from Viwasupco. Previously, in October 2016, Vinaconex planned to put its entire holding in Viwasupco on sale. However, the divestment was not implemented and no specific information about the deal had been published to date.

Established in 1977, REE is a publicly-traded diversified business group operating in the primary fields of mechanical and electrical engineering services (M&E), manufacturing, assembling and sales of Reetech air-conditioner systems, real estate development and management, and power and water utility infrastructure construction. At present, the largest automotive group from Singapore, Jardine Cycle & Carriage Limited Company (JC&C), owns 22.87 per cent stake (63.7 million shares) at REE.

Sinh Thai LLC joined the Song Da water project by acquiring 43.06 per cent stake in Viwasupco from Singaporean Acuatico Pte., Ltd. The purchase was completed in March 2016.

Viwasupco is the Vinaconex subsidiary posting the best business results. However, it became infamous after the Song Da water pipe broke 21 times in seven years, impacting households across Hanoi.

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