Sale of stake in An Giang Plant Protection
26 September 2014
VinaCapital Vietnam Opportunity Fund Limited
VOF sells stake in An Giang Plant Protection
VinaCapital Vietnam Opportunity Fund Limited ("VOF" or "the Company"), an AIM-traded investment company established to target key growth segments within Vietnam, announces today that it has finalized the Share Purchase Agreement ("SPA") to divest its stake in An Giang Plant Protection JSC (AGPP), to Standard Chartered Private Equity by completing all required conditions precedent.
VOF will sell its 23.6 percent stake in AGPP for USD63.1 million in cash or VND85,000 per share, representing an IRR of 23.7 percent over a period of five years. Initially, VOF invested in AGPP as a private equity investment and has since seen it become a public company with over 100 shareholders. AGPP is currently trading in the OTC market and therefore, VOF has been able to mark-to-market its holding in AGPP on a monthly basis. The value of this transaction represents a premium of 22.0 percent over the 31 May 2014 net asset value, the last recorded value prior to receiving an offer for the shares.
An Giang Plant Protection is currently the market leader in the manufacture and distribution of pesticides in Vietnam. The company utilizes a distribution network of 500 wholesalers and 4,500 retail outlets to distribute its 23 stock-keeping units (SKU). The company has over 3,000 employees in offices in Ho Chi Minh City, the Mekong Delta and Cambodia, two pesticide, one seed factory, a research and development center, one packaging plant and six rice mills.
In 2013, the company launched its sixth (out of 12 planned) rice mill, located in Hong Dan (Bac Lieu province). The total capital expenditure for these twelve mills is estimated at approximately USD137 million. In 2013, AGPP delivered revenue of USD354 million, an increase of over 17.0 percent year-on-year. During the same period, AGPP's earnings grew over 18.8 percent, reaching USD24.0 million. Revenue for the first half of 2014 was approximately USD200 million, roughly half of the company's full year target of USD399 million, while first half 2014 net income was USD12.0 million.
Regarding the transaction, Andy Ho, VinaCapital's Chief Investment Officer stated, "This significant divestment highlights the quality of VOF's overall investment portfolio and provides further evidence to support our belief; that VOF's share price to NAV discount is too wide. Proceeds from this divestment are currently being considered for a few major private equity investment opportunities and the ongoing share buyback programme."
More information on the Company is available at www.vinacapital.com/vof
Enquiries:
David Dropsey
VinaCapital Investment Management Limited
Investor Relations/Communications
+84 8 3821 9930
Philip Secrett
Grant Thornton UK LLP, Nominated Adviser
+44 (0)20 7383 5100
Hiroshi Funaki / Andrew Davies
Edmond de Rothschild Securities, Broker
+44 (0)20 7845 5960
David Benda / Hugh Jonathan
Numis Securities Limited, Broker
+44 (0)20 7260 1000
Andrew Walton
FTI Consulting, Public Relations (London)
+44 (0)20 7269 7204
This information is provided by RNS
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