April 17, 2018 / 4:30 AM / 2 days ago

Vingroup could raise as much as $2 billion in Vietnam's biggest share sale -sources

SINGAPORE/HANOI (Reuters) - Vingroup JSC VIC.HM is looking to raise as much as $2 billion from the listing of its residential property business in what could be Vietnam’s biggest initial equity offering, sources familiar with the matter said on Tuesday.

Residential apartment complex Vinhomes Metropolis of Vingroup is seen under construction in Hanoi, Vietnam April 17, 2018, REUTERS/Kham

The fund raising by Vinhomes would be double to what sources had estimated last month and comes as foreign and local investors pour money into the country, attracted by a strong economic growth and a slew of sales by state-owned and private companies.

A couple of units of Vingroup are keen to sell down and raise funds through the equity offering, said two sources, who did not want to be named as the details are private.

Vingroup, Vietnam’s biggest property developer, expects to kick off roadshows for the offering from April 27 and price it on May 7, with trading set for May 17, according to a copy of the term sheet seen by Reuters.

The offering will consist entirely of sales by existing investors, the termsheet showed.

Vingroup declined to comment on the share sale but said in a statement earlier in the day that Vinhomes filed an application this month to list its shares on the Ho Chi Minh Stock Exchange.

In the same statement, Vingroup said it had raised $1.3 billion by selling a stake in two of its units to Singapore’s GIC and through a loan, also from the sovereign wealth fund.

A man works at the construction site of Vingroup's residential apartment complex Vinhomes Metropolis in Hanoi, Vietnam April 17, 2018, REUTERS/Kham

It identified one of the units as Vinhomes.

The money raised will be used to fund the units’ projects, Vingroup said, adding that Credit Suisse had arranged the deal.

Equity issues are booming in the Southeast Asian nation as it speeds up a privatization drive. Strong interest from foreign investors and local funds has pushed up the benchmark index .VNI by 17 percent so far this year, making it one of Asia’s best performers after rising nearly 50 percent last year.

Reuters reported last week that Vietnam Technological and Commercial Joint Stock Bank launched an IPO that aims to raise as much as $922 million and has attracted global funds, including GIC, as cornerstone investors.

Vingroup is a diversified company, operating in real estate, education, healthcare, entertainment, retailing, agriculture and automobile manufacturing sectors.

Last year, Warburg Pincus-backed Vincom Retail JSC VRE.HM, Vietnam’s biggest shopping mall operator and a unit of Vingroup, raised roughly $700 million through an equity offering.

Reporting by Khanh Vu and Anshuman Daga; Editing by Himani Sarkar and Muralikumar Anantharaman

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