Norwegian fund expected to lead SeABank private share offering

July 06, 2023 | 14:49
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Southeast Asia Commercial Joint-Stock Bank (SeABank) plans to issue up to 94.6 million shares, with the Norwegian Investment Fund, Norfund, being the expected primary investor, signifying a significant bolstering of foreign investment.
Norwegian fund expected to lead SeABank private share offering

SeABank has just unveiled its strategy to privately issue a fresh tranche of shares, reinforcing its commitment to adherence to the regulations pertaining to maximum foreign ownership levels.

In a detailed plan, BRG Group-backed SeABank anticipates the private issuance of up to 94.6 million additional shares. This represents approximately 4.64 per cent of the bank's currently circulating shares.

The main investor in this issuance is expected to be Norfund, the Norwegian Investment Fund dedicated to supporting developing nations.

Norfund is owned and funded by the Norwegian government and is its most important tool for strengthening the private sector in developing countries and reducing poverty.

On its official website, the fund says, “Norfund helps to build sustainable businesses that would not otherwise be developed because of the high risks involved, with the main investment region being Sub-Saharan Africa. Norfund also invests in selected countries in Asia and Latin America.”

The specific offering price, subject to negotiation with the investor, will ultimately be determined by the SeABank board. The bank anticipates that this initiative will boost its coffers by between $50.71 million and $145.96 million.

SeABank has committed these prospective funds to the bolstering of capital for its business operations, including infrastructure investments, advancements in IT systems, and expanding its banking network.

The timing for this private offering is currently slated for 2023 or, dependent upon favourable market conditions, an alternative time as decided by the Board of Directors.

Foreign ownership in the bank currently stands at 0.189 per cent of the shares, with a permissible upper limit of 5 per cent for foreign stake holding.

In an endeavour to comply with regulations on maximum foreign ownership during this share offering, SeABank is set to implement a foreign limit at 1.288 per cent, and will take other measures as necessary to ensure foreign ownership does not breach this stipulated point.

SeABank ranks among a minority of banks in Vietnam that currently operate without a foreign strategic stakeholder, an issue which has consistently been highlighted by its shareholders in recent AGMs.

In 2018, French multinational Société Générale, SeABank's strategic foreign stakeholder at the time, divested its entire equity stake in the bank. This marked the end of a decade-long partnership, having initially obtained 15 per cent of SeABank's capital in 2008.

Following this full divestiture by Société Générale, SeABank instituted a foreign ownership limit of zero, effectively halting any foreign ownership. Subsequently, as part of its revised foreign ownership policy, the bank increased this cap to 5 per cent in August 2021.

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