A consortium led by GIC, Singapore’s sovereign wealth fund, and Vingroup JSC (Vingroup) signed definitive agreements for an investment of $500 million (VND11.5 trillion) for a minority stake in VCM Services and Trading Development JSC (VCM), a subsidiary of Vingroup that engages primarily in consumer retail in Vietnam. Following the transaction, Vingroup will continue to be the controlling shareholder of VCM.
|GIC to invest $500 million in VCM, a subsidiary of Vingroup. Source: dealstreetasia.com |
Following the transaction, Vingroup will continue to be the controlling shareholder of VCM, GIC said in a statement. “As a long-term investor, GIC is confident in the growth outlook for disposable incomes and household consumption in Vietnam,” it added.
Last month, Vingroup split VinCommerce, the former entity that ran its retail business, into P&S Trade and Investment JSC and Adayroi Commerce and Service Development JSC. Adayroi is Vingroup’s e-commerce venture. In conjunction with the split, Vingroup also set up VCM to indirectly hold shares in VinCommerce.
Vingroup now holds 64.3 per cent in VCM.
GIC is showing interested in the Vietnamese market by pouring money in giant groups like Masan, Vietjet, Vinamilk, FPT, or PAN Group. GIC also invested $853 million in Vinhomes after the company’s IPO in 2018.
Since 2013, Vingroup has mobilised $6.9 billion via 15 transactions, including investments and loans.
After shifting towards becoming a technology group and producing automobiles, Vingroup sold 6 per cent of its stake to South Korea’s SK Group for $1 billion.
In 2018, Hanwha Asset Management also spent $400 million on Vingroup’s convertible preference shares.
On the first half of 2019, Vingroup's revenue reached VND61.16 trillion ($2.66 billion), a slight increase compared to the same period last year. Pre-tax profit increased by 19 per cent to VND6.84 billion ($297.39 million).