Hanoi-based LPBank seeks to acquire 5% stake in tech giant FPT

Hanoi-based Loc Phat Vietnam Joint Stock Commercial Bank, or LPBank, plans to spend hundreds of millions of U.S. dollars to purchase up to a 5% stake of FPT Corp., a leading tech company in Vietnam.

The transactions will be made in 2024 and 2025 and/or "at a suitable time" after the bank receives approval from relevant authorities, LPBank said in a document sent to its shareholders on Thursday in preparation for a tentative extraordinary general meeting.

The amount to be spent on the purchase must be, at most, the legal threshold. Under the bank’s charter, a transaction with value exceeding 20% of its charter capital must obtain shareholders' approval.

In addition, according to the new Law on Credit Institutions, effective on August 1, LPBank must secure approval from the central bank for an investment in a non-core business.

Elaborating on the plan, LPBank said that the FPT stock (HoSE: FPT) presents attractive yield rates, and the investment in FPT shares will help the bank diversify its asset portfolio.

FPT is moving higher up in the tech value chain thanks to a focus on artificial intelligence, Big Data, cloud services, and other potential sectors, said the document.

In addition, the FPT stock has grown sustainedly over the years and pays out dividends regularly. It presents good liquidity and is a constituent of the VN30 Index, comprising the 30 best tickers on the Ho Chi Minh Stock Exchange, and appeals to foreign investors in the medium and long terms.

FPT shares closed at VND135,200 ($5.38) on Thursday. At this price, LPBank will have to spend around VND9,825 billion ($392.2 million) on acquiring a 5% stake in FPT.