Singapore-based conglomerate Fraser & Neave (F&N) on Monday bought an additional 5.4% stake in Vietnam Dairy Products, better known as Vinamilk, through two wholly owned subsidiaries. The deal was valued at 11.2 trillion dong or $498.9 million.
That brings F&N’s stake in the top Vietnamese diary producer to 16.35%, up from 10.95%, and raises the share of the company held by foreign investors to 53.63% from 48.23%.
This is the first public auction of a slice of the company held by the Vietnamese government. Vinamilk.
is the largest listed company in Vietnam, with a market capitalization of $8.7 billion. The government, which still holds almost 40% of the company, plans to sell off more Vinamilk shares in the coming years.
Vinamilk closed at 133,700 dong on Monday, down 7% from F&N’s acquisition price of 144,000 dong per share. «The bidding price is fine,» an F&N representative said, expressing confidence in the investment, citing the company’s growth prospects and solid management team.
F&N has had a stake in Vinamilk since 2005. It is continuing to monitor the divestment plans of the State Capital Investment Corporation — Vietnam’s sovereign wealth fund — for opportunities to increase its stake in the dairy company.
«We have been waiting for the State Capital Investment Corporation to sell a significant volume of Vinamilk shares for a very long time. We are happy with the outcome now,» F&N Chief Financial Officer Hui Choon Kit told reporters after the share purchase.
Vinamilk removed its cap on foreign ownership in July. Foreign investors can, in theory, hold 100% of the company. However, Vinamilk CEO Mai Kieu Lien recently told Channel NewsAsia the company plans to discuss changing its charter to ensure «the company does not fall under any controlling power.»
In the latest sale, 60% of the Vinamilk shares offered were sold. SCIC Chairman Nguyen Duc Chi said the sale was a success considering that many investors have been pulling out of emerging and developing markets with the Trans-Pacific Partnership trade agreement virtually dead, and given that the U.S. Federal Reserve is likely to raise interest rates this week.
Last year, Vinamilk was placed at the bottom of Vietnam’s divestment list, as it is the most profitable listed company in which the state has a controlling stake. Nevertheless, Hanoi is expected to dispose of 9% the company this year, with the help of Morgan Stanley Asia, Saigon Securities and VinaCapital Corporate Finance Vietnam.
Partial sale of Vietnamese government stake first of 12 planned asset disposals
The divestment was also the first international auction among 12 state enterprises named by Prime Minister Nguyen Xuan Phuc for disposal. Vietnam is looking to sell off assets to reduce the country’s high public debt, estimated at nearly $120 billion, or 62.2% of gross domestic product, at the end of 2015.
Source: AsianNikkei
Link: http://asia.nikkei.com/Business/AC/F-N-buys-nearly-500-million-of-Vinamilk-shares?page=2