South Korea’s SK Group to buy $1 billion stake in Vingroup

March 23, 2019 | 12:35

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South Korean conglomerate SK Group plans to acquire a $1 billion stake in Vingroup through the issuance of shares through private placement.

south koreas sk group to buy 1 billion stake in vingroup

SK Group is continuing acquiring stakes in Vietnam's leading conglomerates

SK Group, through its investment arm SK Southeast Asia Investment, has decided to invest $1 billion to acquire shares of Vietnam’s leading privately-run conglomerate Vingroup, according to Bloomberg.

Recently, Vingroup has announced a plan of issuing shares through private placement, aiming to raise at least VND25 trillion ($1.1 billion). The group expected to offload 250 million shares or 7.8 per cent of the shares in circulation to a maximum of five foreign investors, at a minimum price of VND100,000 ($4.3) per share.

Of the total funds raised from the process, around VND10 trillion ($434.8 million) would be utilised for debt restructuring, VND6 trillion ($260.9 million) to invest in Vingroup’s subsidiaries, including VinFast, VinTech, and Vinsmart, while Vingroup plans to allocate VND9 trillion ($391.3 million) as short-term loans for the business operations of the group and its subsidiaries.

Vingroup’s shares are being traded at nearly VND120,000 ($5.2), the highest since its first listing and 20 per cent higher than the minimum offering price of the upcoming share issuance.

As of March 22, Vingroup was Vietnam’s biggest public company with the market capitalisation of over VND377 trillion ($16.4 billion).

Last September, SK Group invested $470 million to purchase 110 million treasury shares of Masan Group Corporation, equivalent to a 9.5 per cent stake, thus becoming its largest foreign shareholder.

SK Group, one of the leading conglomerates specialising in energy, telecommunications, hi-tech components, logistics, and services, has set foot in 40 countries and reported a consolidated revenue of $141 billion as of the end of 2017.

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