Vingroup member to issue $435 mln bonds for property projects

Vietnam Exhibition Fair Center JSC, a subsidiary of Vingroup, will raise VND10 trillion ($435 million) from issuance of bonds to existing shareholders to fund two big property projects in Hanoi, including an exhibition center.

The company, registered on the unlisted public company market (UPCom: trading code VEF), announced this plan in a document sent to its shareholders.

Specifically, VEF will issue 852,997,376 shares. For each share, shareholders can buy 5.12 shares at the book value of VND10,000 a unit. The proceeds will raise VEF’s chartered capital from VND1,666 billion to VND10,196 billion ($444 million).

About $304 million will be spent on the Vinhomes Co Loa urban complex project in Xuan Canh, Dong Hoi and Mai Lam communes of Dong Anh district on the outskirts of Hanoi. The total investment capital is nearly $1.52 billion, of which 15 percent comprises investor equity. Construction is set to last from 2020 to 2025.

Nearly $64 million will serve the exhibition center project at 148 Giang Vo street in downtown Hanoi. This project is capitalized at over $759 million, of which 20 percent comprises investor equity.

VEF was formerly named Vietnam Exhibition Fair Center Ltd., with the state its sole owner. Following privatization in 2015, Vingroup now holds an 83.32% stake, while the Ministry of Culture, Sports and Tourism owns 10%, and Green City JSC, 4.66%.

VEF is now the investor of two other big projects. One is a national exhibition fair center project in Dong Hoi and Xuan Canh communes, Dong Anh district, Hanoi. It is capitalized at more than $319 million, of this 15% comprises investor equity. Construction commenced in the fourth quarter of 2020 and is set to complete in the third quarter of 2024.

The other is a $831 million functional area in the South Thang Long Road urban project in Me Tri, Trung Van and Phu Do communes of Nam Tu Liem district, Hanoi, with 15% being investor equity.

VEF’s profit after tax grew 135% to $14.3 million in 2021. It is currently among the stocks with the highest market price. The price topped VND270,000 ($12) at a time in 2021 and was VND213,000 on April 15, 2022, which pushed its capitalization up to $1.6 billion.

Vingroup (VIC), Vietnam’s biggest listed conglomerate, aims to reap VND6 trillion ($262 million) in profit after tax this year, while it incurred a $329 million loss last year. Its net revenue is set at $6.09 billion, up 11.4% against the actual figure last year, according to a company document released prior to its upcoming shareholder meeting.

VIC said it would launch smart electric cars onto the global market in 2022 and is receiving orders for VF5, VF8 and VF9 models.

After the success of three mega urban complexes, namely Vinhomes Ocean Park, Vinhomes Smart City and Vinhomes Grand Park, Vingroup subsidiary Vinhomes (VHM) will launch three new mega urban projects in 2022.

Another member, Vincom Retail (VRE), plans to inaugurate Vincom Mega Mall Smart City in Hanoi and two Vincom Plaza complexes this year.

Vingroup, Vinhomes and Vincom Retail are all listed on the Ho Chi Minh Stock Exchange (HoSE).