VOF swoops to raid key investor IBS

“After months of negotiations, IBS shareholders have agreed to sell their company to VOF and the buyout is now completed. This is the first time VOF has bought out a foreign company since it was established in 2003,” confirmed Don Lam, managing partner of VinaCapital.
He declined to reveal the exact price, but said it was much lower than the $38 million that IBS, whose shareholders are mainly from the US and Singapore, had already invested in two projects in Vietnam.
The two projects are Indochina Stone, fully owned by IBS with an investment of $5.5-million, and American Home, a $46.4-million joint venture, formerly known as Indochina Ceramic (Vietnam), with IBS holding a 70 per cent stake and local partner Genimex the balance. Both the projects, located in the southern province of Binh Duong, produce construction materials.
“In addition to companies with a leading position in their industry, strong brand names and solid management, we are seeking to invest in foreign-invested enterprises that are operating in Vietnam ineffectively or that have a majority stake in joint ventures where the foreign shareholder would not like to continue, and then to enhance their value by our investments and involvement. The [IBS] buyout is in line with this strategy,” he said.
Don did not provide details about the performance of the IBS’ two projects in Binh Duong province, but said, “generally, they do not operate effectively, so IBS wanted to sell them for other plans in other countries, maybe.”
“With the buyout, VOF, through its management arm VinaCapital, will replace IBS in managing these projects. We believe that with our financing and expertise, we will add value to their assets,” he said.
IBS executives were not available for comments on the buyout.
Don also told Vietnam Investment Review that in Singapore this week, VOF would ink a deal to acquire a 50 per cent stake owned by foreign investors in a five-star hotel project in Hanoi. He declined to name the project or provide more details.
Managed by VinaCapital, VOF is a close-ended investment fund listed on the second board of the London Stock Exchange. The fund now has a capital size of $95 million, with its major investors, who have invested their money in the fund, from the US, Europe and Asia. Since the fund’s inception in 2003, VOF has invested approximately $80 million in portfolio companies, including private equity, listed shares, unlisted shares, and equitised state-owned enterprises.
The fund focuses on domestic sectors such as financial services, real estate, education, consumer goods, and retail, which are exposed to the growing incomes of the population.


According to the UK’s fund operation research agency, LCF Rothschild, VOF was the best performing fund in Vietnam last year with a 25 per cent increase in net asset value (NAV) and a 38 per cent increase in share prices. It was the first fund in Vietnam to provide a dividend to its investors.
The fund is set to raise additional capital of $50-60 million by the year-end to tap arising investment opportunities. VOF executives said Vietnam’s growing economy, with its high GDP growth, fast developing financial system, accelerated state-owned enterprise (SOE) equitisation and dynamic private sector, would provide plenty of opportunity.