Singapore’s Jardine Cycle & Carriage buys automaker Thaco bonds worth $350 mln

Jardine Cycle & Carriage, an investment holding company in Singapore, has spent $350 million on buying bonds of Thaco, one of the biggest automakers in Vietnam, in a private placement.

In an announcement last week, the Singaporean firm said the convertible bonds are in Vietnamese dong with a maturity date of November 14, 2028.

Thaco was the biggest automaker in car sales in the first 10 months of this year, according to data of the Vietnam Automobile Manufacturers' Association (VAMA). During this period, VAMA members, not including VinFast and Hyundai, sold 235,296 vehicles, down 29% year-on-year.

Conglomerate Thaco, known for manufacturing and selling vehicles like KIA, Mazda, Peugeot, BMW and its own Thaco trucks and buses, recorded total sales of 76,934 units in the period. This included 31,897 KIA; 27,791 Mazda; and 12,322 Thaco trucks, which are top-selling brands in Vietnam.

In the first half of this year, Thaco recorded a post-tax profit of VND1,076 billion ($44.5 million), down 78% year-on-year, according to the firm’s filings with the Hanoi Stock Exchange.

Jardine Cycle & Carriage, which holds a 26.6% stake in Thaco, recorded profits of $648 million on revenues of $11.69 billion in the first half of this year, up 33% and 9% year-on-year, respectively. Thaco contributed $15 million to the total, down 72%, the Singaporean firm said.

Thaco’s underperformance was affected by the challenging economic environment in Vietnam, it added.

In Vietnam, Jardine Cycle & Carriage also holds a strategic 34.4% stake in Refrigeration Electrical Engineering Corporation, listed on the Ho Chi Minh Stock Exchange (HoSE) as REE; and 10.6% in Vinamilk, the country's largest dairy firm, listed on the HoSE as VNM.