Sabeco wants to remove the FOL

Sabeco's proposal to remove the FOL could open the doors for further ThaiBev control

The Board of Directors of Sabeco has recently submitted a document to the State Securities Commission of Vietnam (SSC) and the Ho Chi Minh City Stock Exchange (HSX) proposing the lifting of the FOL.

At present, the Ministry of Industry and Trade represents the state-owned 36 per cent capital in Sabeco, while Vietnam Beverage owns 53.59 per cent. Vietnam Beverage is wholly-owned by Vietnam F&B Alliance Investment JSC, which is in turn indirectly owned by Beer Co., Ltd., a Hong Kong-based company wholly-owned by ThaiBev.

Vietnam Beverage is a legal entity which was established in Vietnam to conduct the purchase of the Sabeco stake at the end of last year. Vietnam Beverage was established to circumvent the foreign ownership limit of 49 per cent allotted for a single company.

Thus, removing the FOL at Sabeco will allow Vietnam Beverage to legally transfer its stakes to ThaiBev if it so wishes, consolidating the Thai firm’s hold on the beer firm and cutting out the middle-man – or, alternatively, pass on the interest to another interested foreign companies.

Earlier on December 18, Vietnam Beverage (49 per cent controlled by ThaiBev), won an auction to acquire 343.6 million shares, equivalent to 53.5 per cent of Sabeco at VND320,000 ($14.09) apiece.

According to ThaiBev, the entirety of the funds used for the deal came from loans. Notably, it borrowed $3.05 billion from local banks, including Bangkok Bank, Kasikornbank Public, Krung Thai Bank, Bank of Ayudhya, and Siam Commercial Bank, with two-year terms.

In addition, its wholly-owned subsidiary Beer Co. borrowed another $1.95 billion from Mizuho Bank and Standard Chartered Bank’s Singapore branch.

According to the financial statement of Sabeco, in the third quarter of this year it earned a consolidated revenue of VND8.56 trillion ($372.1 million), up 6.3 per cent, however, its profit only reached VND1.03 trillion ($44.7 million), a decrease of 10.2 per cent on-year. Especially, its net profit was VND975 billion ($42.3 million).

Regarding the accumulated financial statement of the first nine months, Sabeco reported VND25.5 trillion in revenue ($1.1 billion), VND3.84 trillion ($166.9 million) in after-tax profit, up 7.8 per cent in revenue and down 6.3 per cent in after-tax profit.

By the end of the third quarter, Sabeco had total assets of VND23 trillion ($1 billion), 66 per cent of which were short-time assets.