Warburg invests $200m in Vincom

Wednesday, May 29, 2013 17:29

Vincom Center B is one of the most luxury shopping centers in HCM City— Photo from Vingroup
HA NOI (Biz Hub) — Vingroup Joint Stock Company (Vingroup) today announced that the global private equity firm Warburg Pincus would invest US$200 million in a strategic partnership with Vingroup to substantially build out Vingroup's retail property business Vincom Retail.

This marks the first investment by Warburg Pincus in Viet Nam, and it is the largest initial investment to date in a Vietnamese company by a global private equity firm.

According to Vingroup, Vincom Retail, which consists of seven assets valued at a total of about US$1.1 billion, is the country's largest owner and operator of shopping malls, which include world class shopping, recreational and dining facilities.

The investment of $200 million to acquire about 20 per cent equity in Vincom Retail will help representatives of Warburg Pincus join the board of directors of Vincom Retail also in Vingroup.

The agreements also include Warburg Pincus' commitment to participate in future capital raising by Vingroup in an amount of up to US$25 million - and possible additional investment if $100 million in Vincom Retail in its expanded plan.

The investment by the Warburg Pincus consortium is the latest success for Vingroup in raising funds from global capital markets. It follows on from Vingroup's US$300 million convertible bond issuance to international investors in 2012.

Le Thi Thu Thuy, Vingroup's vice-chairwoman said the investment would help the group pursue new opportunities in high-growth urban districts

Joseph Gagnon, managing director at Warburg Pincus, said they were excited to partner with Viet Nam's premier property development group to further capitalise Viet Nam's favorable long-term economic outlook.

The New York-based Warburg Pincus is an experienced partner for management teams seeking to build durable companies with sustainable value.

Founded in 1966, the company has raised 13 private equity funds, which have invested more than $45 billion in more than 675 companies in more than 35 countries. It is the first time they have invested in Viet Nam. — VNS

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