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PHI signs stock swap agreement in Saigon Pho Palace deal

Released at: 15:08, 31/10/2018

PHI signs stock swap agreement in Saigon Pho Palace deal

Photo: Saigon Pho Palace

51% of all issued and outstanding ordinary stock of SGP to be exchanged for preferred stock or promissory note.

by Doanh Doanh

The PHI Group, Inc., a diversified US holding company focused on mergers and acquisitions and investments in select industries and special situations, has signed a Stock Swap Agreement with the majority shareholder of the Saigon Pho Palace JSC (SGP) in order to exchange 51 per cent of all issued and outstanding ordinary stock of SGP for Preferred Stock or a promissory note of PHI Group, Inc., either of which may be convertible into shares of a new subsidiary of the company.

The amount of Preferred Stock or the value of the convertible note of the company to be issued for the exchange of 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.

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.

It is estimated that this market segment in Vietnam generates approximately $8 billion in revenue a year. In addition, SGP also has plans to build new chains of 50 SGP Bulkoki restaurants by 2025 and 200 SGP X-N Coffee outlets by 2027. According to Mr. Quy Minh Le, SGP’s Chairman and General Director, its unaudited annual revenues were over $90 million and are expected to rise sharply in the future with the additional restaurant and coffee shop chains.

According to the Stock Swap Agreement, PHI will set up a special purpose vehicle as the holding company for the 51 per cent equity interest in SGP and, subject to meeting all necessary compliance requirements, file a registration statement with the US Securities and Exchange Commission to take the subsidiary public in the US stock market at an appropriate time in the future to create a platform for SGP’s growth and expansion.

The majority shareholder of SGP will have the option of converting the Preferred Stock or the convertible note of the PHI Group into 80 per cent stock of the special purpose vehicle when the subsidiary has become a fully reporting publicly traded company in the US stock market. The transaction is scheduled to close by November 30, subject to additional due diligence and the independent valuation of SGP.

“We believe by combining our strengths we will able to create an unprecedented platform for SGP to reach new heights through robust growth and expansion,” said Mr. Le. “We are also confident that with proper financial 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 significant value for our shareholders.”

“We are convinced that not only can we assist SGP to access international funding sources for growth but can also help create corporate advantages by bringing experience and expertise to support SGP’s leaders in their pursuit of excellence and sustainable value,” said Mr. Hoang Dinh Vo (Jack Vo), Vice President of Global Business Development at the PHI Group.

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