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Mystery foreign investor buys $396mn stake in Vinamilk

Released at: 15:22, 11/11/2017

Mystery foreign investor buys $396mn stake in Vinamilk

Photo from vinamilk.com.vn

Unnamed investor buys 48.3 million shares on offer for $8.2 apiece on November 10, or 24% higher than starting price.

by Quang Huy

Vietnamese dairy giant Vinamilk sold a 3.33 per cent stake to an unnamed foreign investor for VND8.99 trillion ($396 million) on November 10.

The investor bought the 48.3 million shares on offer for VND186,000 ($8.2) apiece, or 24 per cent higher than the starting price of VND150,000 ($6.6) the State Capital Investment Corporation (SCIC) announced last week. It forecast at the time that the sale would fetch VND6.5 trillion to VND7 trillion only ($286.3 million to $308.4 million).

The share sale, which attracted 19 investors including six foreign firms that registered to buy 73.8 million shares of Vinamilk - representing an over subscription of 1.53 times - reduced State ownership in Vinamilk, Vietnam’s largest listed firm, to 36 per cent; sufficient to retain veto rights.

The sale was absent of some of the restrictions applied to a sale last December, such as a purchase cap on each individual investor.

The SCIC attempted to sell a 9 per cent stake in Vinamilk last December but was only able to offload 5.4 per cent to two investors - both units of existing shareholder Fraser and Neave Ltd.

The muddled sales process underscored Vietnam’s relative inexperience and investor wariness about State control as the government seeks to push forward with a major equitization drive; one that has already been hampered due to the small stakes on offer and concerns about vested interests.

The government had initially planned to sell its entire 44.7 per cent stake in Vinamilk.

It is trying to divest from hundreds of State-owned enterprises (SOEs), including brewers Habeco and Sabeco, in which it owns a combined $7.8 billion worth of shares by market value.

Vinamilk’s shares closed on November 10 at VND173,800 ($7.65). While the country’s largest brewer, Sabeco, has seen a staggering increase in its stock price since its debut late last year, becoming the highest-priced stock, Vinamilk retains its leading position in terms of market capitalization, which surpassed $11 billion after the sale.

On the same day, foreign investors net bought 6.4 million shares of Vinamilk worth VND1.1 trillion ($48.4 million) via order-matching transactions.

In the first nine months of this year, Vinamilk saw its revenue rise 10.34 per cent year-on-year to VND38.76 trillion ($1.7 billion), or 76 per cent of the annual plan. Pre-tax profit rose 12.2 per cent to VND10.1 trillion ($444.6 million), while after-tax profit increased 13.6 per cent to VND8.5 trillion ($374.2 million). The company projects revenue of VND51 trillion ($2.24 billion) this year and net profit of VND9.73 trillion ($428.3 million).

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