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PHI Group forms new subsidiary

Released at: 11:45, 06/11/2018

PHI Group forms new subsidiary

Photo: Saigon Pho Palace

Subsidiary a special purpose vehicle to hold PHI's 51% equity interest in Saigon Pho Palace JSC.

by Linh San

The PHI Group, Inc. has formed a new subsidiary, American Saigon Palace Group (ASPG), a Wyoming corporation, as the special purpose vehicle to hold its 51 per cent equity interest in the Saigon Pho Palace JSC (SGP).

According to the previously announced Stock Swap Agreement between the majority shareholder of SGP and the group, PHI will receive 51 per cent of all the issued and outstanding ordinary stock of SGP in exchange for Preferred Stock or a promissory note of PHI Group, Inc. The amount of Preferred Stock or the value of the convertible note of the company to be issued for the 51 per cent equity interest in SGP will be based on the results of a valuation of SGP’s business by a professional, independent appraisal firm.

The majority shareholder of SGP will have the option of converting the Preferred Stock or the convertible note of PHI Group into 80 per cent stock of ASPG when the subsidiary has become a fully reporting publicly-traded company on the US stock market.

SGP Palace has an excellent track record in the field of hospitality, construction and real estate investment and is currently developing a number of prominent projects in Ho Chi Minh City and other locations in Vietnam. It has been successfully operating a chain of restaurants that cater to wedding banquets and convention events and plans to build 35 more restaurants of this type by 2025.

In addition, SGP also has plans to build new chains of 50 “SGP Bulkoki” restaurants by 2025 and 200 “SGP X-N Coffee” shops by 2027. According to Mr. Quy Minh Le, SGP’s Chairman and General Director, its unaudited annual revenues are approximately $90 million and are expected to rise sharply with the additional restaurant and coffee shop chains in the future.

SGP will proceed with the necessary steps, including a business valuation by an independent appraisal firm and financial audits according to US’s Generally Accepted Accounting Principles (GAAP). The PHI Group expects to be able to report consolidated operating results from SGP after the closing of the Stock Swap Agreement, and, subject to meeting all necessary compliance requirements, intends to file a registration statement with the US Securities and Exchange Commission to take ASPG public on the US stock market at the appropriate time in the future.

“We look forward to creating a platform with American Saigon Palace Group for SGP to access international capital markets and pursue our growth strategy, both organically and through acquisitions,” said Mr. Quy Minh Le, Chairman and General Director of SGP. “We are confident that with proper resources we will be able to capture 20-30 per cent of this $8 billion market segment in the next five to seven years and create very significant value for our shareholders.”

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