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‘SK takes strategic stake in Vingroup’
Posted on Thursday, 16 May 2019 13:50
South Korean conglomerate SK Holdings is believed to be buying a USD 1.00 billion minority stake in Vingroup some seven months after taking 9.5 per cent of Vietnam’s second-largest corporation, Masan Group.

The information technology services-to-natural gas distributor reportedly said it intends to use the strategic purchase of a 6.1 per cent equity interest to actively explore new business opportunities in the country, including mergers and acquisitions.

Vingroup is the largest enterprise in Vietnam by market value of VND 363,000 billion (USD 15.60 billion), as at 30th April 2019.

The group operates across eight major business segments, including property, consumer retail, hospitality, healthcare and education, which are each structured into separate profit and loss centres.

It entered the fields of smart electronic devices and technology in 2018 through the establishment of VinSmart, which started distributing Vsmart phones in Spain in the first three months of 2019, and VinTech.

Vingroup has laid out 2019 initiatives that include launching eight new Vinhomes projects in Hanoi, Ho Chi Minh City and Hai Phong, and increasing market share in the consumer retail segment by opening new stores.

The conglomerate booked net revenue of VND 21,822 billion in Q1 2019 (Q1 2018: VND 28,451 billion) and to earnings before interest, tax, depreciation and amortisation (EBITDA) of VND 4,805 billion (Q1 2018: VND 4,760 billion).

It posted net profit attributable to shareholders of VND 1,038 billion for the three months (Q1 2018: VND 919.46 billion).

With regards to leverage ratio, Vingroup had a multiple of 4.0x net debt to EBITDA, at the end of March.

Zephyr, the M&A database published by Bureau van Dijk, shows the investment will be one of the top 20 largest deals targeting a Vietnamese company on record.

At USD 9.00 billion, the country’s largest by value is currently the Nghi Son Refinery Petrochemical joint venture formed in November 2018 by Mitsui Chemicals, Vietnam Oil and Gas, Idemitsu Kosan and Kuwait Petroleum.

© Zephus Ltd