Vinaconex divests from long-delayed $2 billion Splendora urban area

Vinaconex has managed to exit the Splendora urban project, possibly handing it fully over to Phu Long Real Estate

Pacific Star will own a 50 per cent stake in An Khanh JVC, with the remaining 50 per cent stake owned by Phu Long Real Estate JSC. Pacific Star was established approximately one month ago with the charter capital of VND200 billion ($8.7 million).

The problem is that the headquarters of Pacific Star is in the Republic Plaza building in Tan Binh district, Ho Chi Minh City which is one of the buildings invested by Thuy Duong – Duc Binh Trading JSC. The legal representative of Thuy Duong – Duc Binh and Phu Long Estate is the same person, namely the female billionaire Nguyen Thi Phuong Thao. Thus, Phu Long Real Estate may now hold the entire stake in An Khanh JVC, but neither companies have issued official information about this.

In 2006, Vinaconex and Posco E&C Group established An Khanh JVC with the charter capital of VND680.5 billion ($29.6 million).

The Splendora urban area sprawls over 264.13 hectares adjacent to Thang Long Boulevard. According to the previously approved planning, the project includes shophouses, villas, a 6.6-hectare artificial lake, gardens, trees, international schools, entertainment areas, offices, and shopping areas.

The project has a total of 6,440 apartments and 1,311 villas and shophouses. Although the construction of the first phase was completed in 2013, the second phase was not implemented until the end of 2017 due to unfavourable real estate market conditions.

The reason behind the long delay in implementing the construction of the project's second phase was a dispute between shareholders.

Notably, due to the prolonged losses of this joint-venture, Vinaconex put its share on sale but found no buyers. One of the reasons was that Posco E&C had a pre-emptive right to buy these shares before Vinaconex sells to a third party. Neither Vinaconex nor Posco has the right to make decisions alone in this joint-venture as each holds 50 per cent.

At its 2017 shareholders' meeting, Vinaconex's board of directors said that it hired a consultant to negotiate a 50-50 split on the project with Posco E&C or to purchase shares held by Posco to implement the project by itself. in January 2018, Posco E&C divested entire ownership in this joint venture to Phu Long Real Estate. However, the second phase has still yet to be completed.