Deal with US investment group to focus on Group's agricultural activities.
A Memorandum of Understanding (MoU) on a private placement of approximately $80 million was officially signed on November 6 by Vietnam’s Hoang Anh Gia Lai Group (HAGL) and the US-based Global Emerging Markets (GEM) investment group.
Under the MoU, $80 million will be fully invested by GEM into HAGL in the next three months, “turning GEM into a major shareholder and strategic investor of HAGL in the near future,” Mr. Doan Nguyen Duc, Chairman and Founder of HAGL, was quoted as saying.
The investment agreement was successfully arranged by the Vietnam-based Bamboo Capital Group and New York’s Asia Global Capital Group, which advised the focus should be on the Vietnamese conglomerate’s agriculture sector.
HAGL has more than 75,000 hectares of sugarcane, rubber, corn and palm trees out of 100,000 hectares of land the group has rights to manage in Vietnam as well as Cambodia and Laos. “Our results to date suggest that the agriculture business in Indochina is on the right track and could have enormous potential for future growth,” Mr. Duc said.
HAGL is planning to develop dairy and beef cattle breeding besides growing more palm trees on the unused 25,000 hectares and GEM’s financing and support is, therefore, expected to allow HAGL to explore growth possibilities at a higher level. Mr. Duc is also confident that the investment commitment from the US investment group will see HAGL attract even more investment.
GEM is also very optimistic about its investment decision. The deal with HAGL is the company’s largest ever in Vietnam and it is planning to invest a further $200 million in the country, according to company spokesman Martin Doan.