Ho Chi Minh City
-based fund management firm VinaCapital
is likely to have sold its holding in Sofitel Legend Metropole Hotel Hanoi
for at least $100 million to a newly-formed hospitality joint venture between it and Warburg Pincus.
VinaCapital Vietnam Opportunity Fund Limited (VOF), run by VinaCapital, last week announced that it had received the first payment of $37 million upon signing and closing the Share Purchase Agreement on the divestment of “an asset” to a newly-formed consortium.
VOF, a closed-ended fund listed on the London Stock Exchange Main Market, will receive minimum net proceeds of $100 million from the sale of the unnamed asset, and the balance of the remaining proceeds will be payable in two annual installments.
According to VOF’s October report, Sofitel Legend Metropole Hotel Hanoi had a net asset value of $60 million, accounting for 7.3% of the fund’s portfolio value as of October 31, which stood at $823.4 million.
The hotel is the third largest investment of the fund, after dairy producer Vinamilk (VNM) and steel maker Hoa Phat Group (HPG), both listed on the Ho Chi Minh Stock Exchange.
In a related development, VinaCapital and global equity firm Warburg Pincus LLC last week agreed to form a hospitality joint venture that will span development, acquisitions and operations of hotel in Southeast Asia.
The joint venture will be seeded initially with $300 million in capital commitments from the two companies and other hospitality assets.
VOF has been seeking to unload its stake in the Hanoi-based hotel for four years, but has not succeeded yet. It has also invested in several hotels such as Hilton Hanoi and Movenpick Saigon.
Five-star Sofitel Legend Metropole Hotel Hanoi was built in 1901 near the Sword Lake in the heart of Hanoi. It is now 50% owned by VOF and 50% held by tour operator Hanoitourist.
The hotel has revenue of around 800 billion dong ($35.7 million) and earns a net profit of nearly $10 million per year, according to Cafef.vn.