VinaCapital Vietnam Opportunity Fund announces divestment of major asset for at least $100m
VinaCapital Vietnam Opportunity Fund (VOF) has announced the divestment of an asset representing 7.6% of FY16 NAV, for a minimum of 65% above its most recent valuation.
The Vietnam-focused fund, which blends investment in listed and private equity with an allocation to property and an operating asset, has not disclosed the identity of the asset, which the announcement says was valued at $60m in the fund’s full-year accounts (to 30 June 2016), equivalent to 7.6% of year-end net assets. However, we believe it is likely to be the Sofitel Legend Metropole Hanoi hotel, the third-largest holding, which appears in the annual report valued at $60.357m. The purchase price represents an uplift of at least 65.7% on the 30 June valuation.
The hotel is VOF’s one remaining operating asset (previously referred to as hospitality assets), down from six stakes in the sector in 2012. It has also reduced its overall real estate exposure, much of which is owned alongside the VinaCapital-managed VinaLand fund, as the latter has moved into a realisation phase.
According to the announcement, VOF will receive minimum net proceeds of $100 million from the sale of the asset, with $37 million payable upon the signing and closing of a share purchase agreement and the balance payable in two annual instalments. The asset is being divested to a newly formed consortium, in which VOF and VinaCapital CEO Don Lam will have a continued interest.
VOF’s managing director Andy Ho said that the fund’s management team look forward to redeploying the proceeds into the many new opportunities in the Vietnamese market as well as toward the fund’s ongoing share buyback programme.
See Edison’s latest note on VOF here.
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