GIC Signs Deal to Buy 7.73% of Vietcombank

Tuan Minh

19:13 29/08/2016

BizLIVE - Singaporean sovereign wealth fund GIC and Vietcombank have entered a partnership to acquire a 7.73% in the latter.

GIC Signs Deal to Buy 7.73% of Vietcombank

GIC is expected to buy a 7.73% stake in Vietcombank. Photo: Internet

GIC, Singapore’s state-run sovereign wealth fund, and Bank for Foreign Trade of Vietnam (Vietcombank) announced today that both parties have signed a memorandum of understanding for GIC to buy a 7.73% stake on a fully enlarged basis in the latter.
Under the agreement, GIC will purchase 305.81 million new shares in Vietcombank, Vietnam’s largest bank by market capitalization. GIC’s investment is part of Vietcombank’s private placement of 359.78 million new shares.
The equity investment by GIC will help Vietcombank raise its registered capital and prepare for the implementation of Basel II. GIC will also offer Vietcombank technical assistance and support.
The investment will be GIC’s first significant direct investment in a commercial bank in Vietnam.
The terms and conditions of the transaction are subject to approvals by the Governor of the State Bank of Vietnam Le Minh Hung and Prime Minister Nguyen Xuan Phuc.
The two sides will conduct further negotiations before signing a share subscription agreement. The transaction is expected to be completed by the fourth quarter of 2016.
Hanoi-based Vietcombank will issue new shares to GIC at a discount to market prices, according to Reuters. The price will be higher to 34,000 dong ($1.52)/share at which the Vietnamese bank sold to Japan’s Mizuho Bank in 2011.
The State Bank of Vietnam now holds a 77.1% stake in Vietcombank while Japanese strategic investor Mizuho Bank owns 15%.
Vietcombank shares stayed flat at 57,500 dong ($2.57) each at the close on August 29.