HO CHI MINH CITY -- Singapore sovereign wealth fund GIC will invest about $1.3 billion in leading Vietnamese property developer Vingroup and related entities for its real estate arm ahead of its market debut, which is slated for the second quarter of this year. The deal is expected to be announced shortly.
The agreement involves Vingroup, its subsidiary Vinhomes and another member company in Vingroup, according to sources. GIC will purchase Vinhomes' ordinary shares and extend a debt-like instrument to the subsidiary, subject to the satisfaction of mandatory regulatory and other conditions. The combined value of the investment and debt instrument is approximately 29.5 trillion dong, or $1.3 billion.
Credit Suisse (Singapore) acted as advisor for the deal, which was finalized on April 12.
GIC's indirect investment portfolio in Vietnam includes such sectors as banking, aviation, consumer and agriculture. This would be the first official investment from the Singapore government fund to Vingroup, sources have confirmed.
Vinhomes operates in the high-end residential property sector, offering luxury serviced apartments and villas across the country. The real estate arm's sales accounted for more than 70% of Vingroup's annual revenue.
Vinhomes, with its charter capital of 26.3 trillion dong, filed documents to list more than 2.6 billion shares on the Ho Chi Minh City Stock Exchange earlier this month. The company's stock is expected to make its debut in the second quarter of this year.
In February, Reuters reported that Vingroup had tapped Citigroup, Credit Suisse Group, Deutsche Bank and Morgan Stanley for the planned $1 billion listing of Vinhomes.
Vingroup has been escalating its investment portfolio diversification into such areas as retail, hospitality, tourism and leisure services, movies, education, healthcare and pharmaceutical production, autos, in addition to investing in public infrastructure projects like urban railways and roads.
The group has said it will retain a majority stake in Vinhomes after listing it on the stock market.