20:28 (GMT +7) - Thursday 14/12/2017

Banking & Finance

LienVietPostBank to buy Sacomreal bonds worth $22 million

Released at: 20:05, 23/05/2017

LienVietPostBank to buy Sacomreal bonds worth $22 million

Photo: Archives

42-month bonds to sell at lower interest rate than real estate developer expected.

by Duy Anh

LienVietPostBank has approved a plan to buy VND500 billion ($22 million) worth of bonds at a company belonging to Sacombank’s founder and his family, the first move in a long-term partnership between the two, a source close to the matter told VET.

Founded by Mr. Dang Van Thanh during his time at Sacombank in 2004, real estate developer Sacomreal will issue VND500 billion ($22 million) worth of bonds with a 42-month tenure to LienVietPostBank at an interest rate lower than what Sacomreal anticipated.

The interest rate, though, reflects the credibility and efficient use of capital in a project LienVietPostBank has evaluated, the source said.

The agreement between the two may shed light on the restructuring process of one of Vietnam’s five weakest banks, which is set to hold its annual general meeting on May 26.  

A senior executive at LienVietPostBank resigned from his post in April and then withdrew from a list of candidates for the new Sacombank Board for the 2017-2021 term, together with a representative from the State-owned Vietcombank.

Mr. Nguyen Van Huong, the recently-resigned Deputy Chairman of LienVietPostBank, is the Deputy Chairman of the one-year old Vietnam Macadamia Association, a social and professional organization co-founded by LienVietPostBank and real estate giant the Him Lam JSC, which holds more than 30 per cent of LienVietPostBank.

It is still unclear why Mr. Thanh withdrew from the list of candidates for Sacombank’s new Board, even though in a statement sent to the central bank earlier this year he proposed participating in the restructuring process of the bank, which he founded in 1991 alongside local and foreign groups and individuals such as the New York-based investment bank Evercore Group and M&A consultants Redsun Capital Limited.

One point of note is that Mr. Thanh had previously planned to acquire LienVietPostBank in 2012. At the bank’s annual general meeting in 2013, Chairman Mr. Duong Cong Minh, who owns 99 per cent of Him Lam, revealed that Mr. Thanh and his family were looking for 6 to 7 per cent of LienVietPostBank at VND20,000 ($0.88) a share after being excluded from Sacombank.

The plan never come to fruition, as Mr. Thanh and his son were briefly held in custody at the end of 2012 while an investigation was conducted into his time at Sacombank, the sale of bank assets, and the family’s outstanding debts. They were released after 48 hours and cooperated fully with authorities.

The case faded from the headlines and wrapped up without a formal conclusion. Sacombank leaders then announced a purchase of 80 million Sacombank shares, worth VND1.6 trillion ($73.4 million), from the family, in a bid to “clear up the credit and bonds that remained valid among related parties.”

At the end of 2016, Mr. Thanh son, Mr. Dang Hong Anh, was the largest shareholder in Sacomreal, with a 10.95 per cent stake, while his family business, the Thanh Cong Group, held 4.91 per cent, according to Sacomreal’s 2016 financial report.

Having recorded consolidated after-tax profit of VND23 billion ($1 million) during the first three-month of this year, up 142 per cent year-on-year, Sacomreal is currently among Vietnam’s Top 10 real estate developers. Revenue from its real estate business increased VND12 billion ($528,840) year-on-year, while financial income rose VND53 billion ($2.3 million) to VND119 billion ($5.24 million) as at March 31.

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