VNG remains committed to potential US listing after IPO delay

October 04, 2023 | 11:22
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Despite pausing its US initial public offering (IPO) due to the prevailing wariness about tech listings, VNG remains committed to proceeding with its public debut in the near future.
VNG remains committed to potential US listing after IPO delay

According to a report on October 2 from TechinAsia, VNG's CEO Le Hong Minh confided internally about the reasons the company postponed its US listing plans. He pointedly suggested that investors remain wary of Asian tech company IPOs.

“I want VNG to list in a strong position with a good chance of price appreciation post-IPO. Despite a challenging macro environment in 2023, all of our businesses are progressing well, and we are seeing major opportunities in our global efforts and AI,” he said.

Over the past year, Minh revealed that the company's leaders had engaged with over 120 global investors to share VNG's narrative. Yet, many appear to be in a wait-and-see mode.

He confidently stated, “I have a strong conviction that we will be able to head back to the market in the very near future.”

As cited by Bloomberg on September 25, an inside source said, "After seeing generally mixed performances by a trio of newly public companies this month, VNG was advised to hold off until market demand improves."

A recent analysis by TechinAsia alluded to a slowdown in VNG's growth trajectory recently, and indicated the company's fintech operations as a notable growth hurdle.

VNG, which debuted as Vinagame in 2004, has transitioned from its initial gaming focus to become a diversified digital powerhouse in Vietnam, offering an array of services from video streaming and news portals to mobile payments. The company has been contemplating a US listing since 2017.

In August, VNG Ltd. filed its Form F-1 with the US Securities and Exchange Commission (SEC).

The tech unicorn, slated to trade under the ticker VNG on the Nasdaq Global Select Market, is targetting an approximate $150 million from this IPO, according to sources cited by Reuters.

The underwriting syndicate for the IPO boasted the likes of Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC, and BofA Securities Inc.

The prospectus submitted to the SEC reveals that VNG's class A shareholders include heavyweights such as Tencent and Ant Group, as well as Temasek and GIC – two investment funds backed by the Singaporean government.

In addition to its current holdings, VNG Ltd. will issue an additional 7.5 million shares to Tencent upon completing the IPO. As such, the two Chinese tech conglomerates will command nearly 73 million class A shares, equating to a 53.1 per cent economic interest in VNG Ltd.

Though they will hold the majority interest, Tencent and Ant will only maintain a 26 per cent voting stake. With 51 per cent of the voting power, co-founders Le Hong Minh and Vuong Quang Khai will still hold the reins on pivotal decisions at VNG Ltd.

VNG delays US IPO amid subdued market appetite VNG delays US IPO amid subdued market appetite

Vietnam's digital stalwart VNG has reportedly shelved its imminent initial public offering (IPO) plans for the US, attributing its decision to the current tepid market response to recent tech listings.

By Trung Duong

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