Bách Hóa Xanh sells 5 per cent stake to Chinese partner

Monday, Apr 15, 2024 10:58

Customers shop at a Bách Hóa Xanh store in HCM City. — VNA/VNS Photo

Bách Hóa Xanh, a subsidiary of Mobile World Investment Corporation (MWG), recently announced that it has successfully completed a private placement deal to sell a 5 per cent stake to CDH Investment.

According to the initial plan, Bách Hóa Xanh had aimed to sell a maximum of 20 per cent of its capital. However, the company has stated that due to positive cash flow and improved business performance, there is no longer a need to proceed with the sale as initially planned.

The value of the deal was not disclosed, but it mentioned that the funds would be utilised for operational activities and business expansion.

Bách Hóa Xanh is a retail chain specialising in food and essential consumer goods, operating under MWG.

Established in 2015, the chain was expected to generate billion-dollar revenues and lead the domestic consumer retail sector. However, in its early stages, the company experienced continuous losses, accumulating a total of VNĐ8.3 trillion (US$332.6 million) in losses by the end of the previous year.

However, in the first two months of the year, Bách Hóa Xanh experienced the highest growth rate among the Mobile World systems. The chain achieved a revenue of nearly VNĐ6.1 trillion, up 47 per cent year-on-year.

Despite operating for fewer days in February due to the Lunar New Year holiday, each Bách Hóa Xanh store generated an average revenue of VNĐ1.8 billion. With the impressive performance, the chain has successfully reached its expected breakeven point as planned.

Meanwhile, CDH Investment, established in 2022 and headquartered in Beijing, is among the first private equity fund management firms in China. It is well-known for its involvement in traditional sectors such as consumer goods and manufacturing. With over $27 billion in assets under management, the firm has invested in more than 350 companies across various industries. — VNS

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