South Korea’s conglomerate SK Group has agreed to buy a 6.1% stake of Vietnam’s largest privately-run Vingroup for US$1 billion to become the latter’s strategic partner, local media reported.
Overview of the signing ceremony.
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SK Group would hold a total of 205.7 million shares of Vingroup, equivalent to 6.1% of its charter capital. The transaction is subject to regulatory approval. Credit Suisse acted as the sole advisor to Vingroup.
SK Group in a statement on May 16 said it will actively seek new business opportunities in Vietnam as a strategic investor in conglomerate Vingroup.
In March, Bloomberg reported SK Group, through its investment arm SK South East Asia Investment, decided to invest US$1 billion acquiring shares of Vingroup.
Vingroup previously had announced a plan to issue shares through private placement, aiming to raise at least VND25 trillion (US$1.1 billion).
The group expected to offload 250 million shares or 7.8% of the share amount in circulation to a maximum of five foreign investors, and the price would be not less than VND100,000 (US$4.3) apiece.
Of the total fund raised from the process, around VND10 trillion (US$430.44 million) would be utilized for debt restructuring, VND6 trillion (US$258.26 million) to invest in Vingroup’s subsidiaries, including VinFast, VinTech and Vinsmart, while Vingroup expected to allocate VND9 trillion (US$387.37 million) as short-term loan for business operations of the group and its subsidiaries.
Last September, SK Group invested US$470 million to purchase 110 million treasury shares of Masan Group Corporation, equivalent to a 9.5% stake, thus becoming its largest foreign shareholder.
Vingroup, once a real estate and retail conglomerate, has grown to become Vietnam’s largest listed firm with a market capitalization of more than US$16 billion. The company recently launched its first smartphones and cars, and is looking to foray into artificial intelligence.
