Saigon-Hanoi Commercial Joint-Stock Bank (SHB) is engaged in discussions to offload up to a fifth of its equity to overseas investors, according to sources familiar with the matter. The impending deal, which values the Vietnamese lender at between $2 billion and $2.2 billion, is attracting considerable interest from a host of investors, notably those hailing from South Korea and Japan.
According to Reuters, contingent upon receiving the green light from the State Bank of Vietnam, this transaction is slated for completion either this year or in early 2024.
In response to an inquiry by Reuters, an SHB spokesperson commented, "We are proactively exploring alliances with a diverse array of partners, including those from abroad, with a view to optimising the benefits for both the bank and its shareholders."
During its AGM on April 11, SHB declared its intention to persist with the issuance of shares specifically catered to foreign investors. The bank unveiled that since the start of 2022, they have embarked on strategic collaborations with a number of prominent financial institutions and organisations.
However, the turbulence in the financial markets towards the end of 2022 impinged on the valuation of public companies and banks. This prompted a strategic pause in SHB's share issuance, designed to safeguard incumbent shareholders and ensure appropriate issue pricing. SHB confirmed the reinstatement of this plan in 2023.
Do Quang Hien, chairman of SHB's Board of Directors, signalled a notable pivot in the bank's approach towards foreign shareholder engagement at the shareholders' meeting. Drawing an analogy with a woman courted by multiple suitors, he eluded that whilst SHB prioritises consistent and faithful partners, it is now receptive to those interested in contributing to management and making a long-term commitment.
"Although a 10-20-year commitment is yet to materialise, we've intensified our engagement with foreign financial conglomerates and are prepared to accept investments lasting 3-5 years," Hien remarked.
He further revealed that SHB anticipates bringing on board a short- or medium-term investor either by year-end or early next year, promising to consult shareholders before finalising such arrangements.
In mid-June, a consortium of 21 shareholders, including 19 individuals and two organisations, inked an agreement to transfer a substantial portion of Saigon - Hanoi Insurance Corporation (BSH) equity - the insurance subsidiary of SHB.
This transaction involved the sale of 75 million shares, which corresponded to an ownership stake of 75 per cent in the company, to DB Insurance – a South Korean firm.
DB Insurance Co., which forms an integral part of the DB Group ecosystem, is a non-life insurance provider in South Korea. The company has garnered a distinguished reputation for its unwavering commitment to sustainable practices and has been consecutively listed on the Dow Jones Sustainability World Index for several years.
Previously, DB Insurance finalised a pact to acquire a controlling stake of 75.18 per cent in Vietnam's Aviation Insurance Corporation.
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