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Banking & Finance

Vingroup secures $300 million syndicated loan

Released at: 09:02, 11/07/2016

Vingroup secures $300 million syndicated loan

Photo: Duc Anh

$300 million for real estate projects and restructuring debts.

by Hong Nhung

Vingroup, a major player in Vietnam’s property sector, has secured an additional international syndicated loan of $300 million to finance its real estate project developments and reorganize its debts, following its first international syndicated loan of $150 million in 2013.

A representative from Vingroup’s Public Relations Department preferred not to disclose to VET which projects would receive funding from the loan. “We cannot reveal at this time the projects to be invested in, as Vingroup has a series of projects in place,” he said.

The loan will be implemented as soon as Vingroup converts the $300 million into its shares. It will pay a floating rate with a margin of 5 per cent compared to the current Libor rate of 0.75 per cent.

Apart from investment, the loan will fund Vingroup’s debt restructuring. “The group’s cash flow is fine and repaying liabilities will only account for a minor part of the loan,” the representative told VET.

With a five-year term and a lower interest rate than the previous loan, this loan will help the company not only balance its local and foreign capital flows but also stabilize its internal finances, reducing risks due to interest rate fluctuations.

The term is double the 2013 loan, with Vingroup being the first Vietnamese real estate company to manage such financing.

Vingroup was also the first in Vietnam to issue offshore convertible bonds valued at $400 million through 2009 and 2012, followed by a $200 million investment by the Warburg Pincus consortium in the company’s retail unit in 2013. The deal put Vincom Retail at a $1.1 billion valuation.

The Warburg Pincus private equity firm from the US injected $100 million in follow-on funding into the company in 2015. Recent Vietnamese media reports have indicated that Vingroup has acquired a land plot in western Hanoi from VinaCapital’s VinaLand Limited for $16.2 million.

Vingroup’s projects real estate projects include Vinhomes Vingroup Central Park, Golden River Vinhomes, Vinhomes Gardenia, Vinhomes Metropolis Lieu Giai and a range of Vincom Shophouse project in major cities.

Retail is a new focus for Vingroup. The number of Vinmart and Vinmart+ supermarket and convenience store outlets in Vietnam stood at 880 as at June.

  • TAGS
  • Vingroup
  • corporate bond
  • international loan
  • Warburg Pincus

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