The Warburg Pincus Consortium has just spent USD 200 million to buy a 20% share in Vingroup's Vincom Retail, a leading real estate developer in Vietnam.
The Vincom Mega Mall - Royal City will be opened in July
This is also the biggest investment from a foreign equity group into a Vietnamese company. Established in 1966, Warburg Pincus, a New York-based group, is managing assets worth USD40 billion globally and currently has investments in 35 countries.
Warburg Pincus has the right to invest USD25 million for Vingroup's IPO in the international market in the future and an additional USD100 million for future expansion or any retail related deals. In return, Vingroup can raise capital to retain its share of Vincom Retail.
Vincom Retail is currently the largest owner of shopping centres in Vietnam that valued at around USD1.1 billion such as the Vincom centres in HCM City and Hanoi and the Vincom Mega Mall project that will be opened in 2013.
Le Thi Thu Thuy, Vice Chairman and CEO of Vingroup said, "This co-operation is a big turn in our group's development, especially during the globalisation process. With the investment, we can speed up construction and expansion. This is also a chance for us to learn from Warburg Pincus' rich expertise about the real estate market."
Joseph Gagnon, managing director of Warburg Pincus said with their ability and Vingroup's understanding of the domestic market, they would reap great profits from Vietnam's long-term economic development, fast urbanisation and the growing middle class.
The collaboration is the Vingroup's newest succession in attracting foreign investment and Warburg Pincus' newest bet in the Asia-Pacific region after countries such as China, India, South Korea or Australia.
Citigroup was hired as the financial advisor to Vingroup, while Credit Suisse is the financial advisor to Warburg Pincus.
Simpson Thacher & Barlett and Allen & Overy will act as legal advisors for Vingroup while Warburg Pincus' advisors are Freshfields Bruckhaus Deringer and YKVN.
