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Singapore’s GIC-led consortium invests $500 million in VinCommerce

Singapore’s GIC-led consortium invests $500 million in VinCommerce

The consortium led by GIC, Singapore’s sovereign wealth fund, has collectively invested $500 million (VND11.6 trillion) for a minority stake in VCM Services and Trading Development JSC, a consumer retail arm of Vingroup.
07:00, 20/09/2019
GIC to invest $500 million in VCM, a subsidiary of Vingroup. (Source: dealstreetasia.com)

According to GIC, Vingroup and VCM have established themselves as reputable retail companies with attractive brands in Vietnam’s fast-growing consumer market.

“As a long-term investor, GIC is confident in the growth outlook for disposable incomes and household consumption in Vietnam,” the investment firm noted in its statement released on September 9.

Following the transaction, Vingroup continues to be the controlling shareholder of VCM, a unit that was established in early August to oversee the operations of its supermarket chain Vinmart and convenient stores Vinmart+.

Last month, Vingroup split VinCommerce, the former entity that ran its retail business, into P&S Trade and Investment JSC and Adayroi Commerce and Service Development JSC. Adayroi is Vingroup’s e-commerce venture. In conjunction with the split, Vingroup also set up VCM to indirectly hold shares in VinCommerce.

VCM was set up as a subsidiary of Vingroup that received the transfer of the conglomerate’s holdings at its retail business VinCommerce. According to Vingroup’s half-year financial statement, it held 64.3 per cent at VinCommerce. VCM is now the direct holding parent company of VinMart and Vinmart +.

Vingroup currently has a network of 2,122 VinMart supermarkets and VinMart+ convenient stores nationwide, which have been both organically grown and acquired through its rivals.

Since 2013, Vingroup has mobilised $6.9 billion via 15 transactions, including investments and loans.

After shifting towards becoming a technology group and producing automobiles, Vingroup sold 6 per cent of its stake to South Korea’s SK Group for $1 billion.

In 2018, Hanwha Asset Management also spent $400 million on Vingroup’s convertible preference shares.

On the first half of 2019, Vingroup's revenue reached VND61.16 trillion ($2.66 billion), a slight increase compared to the same period last year. Pre-tax profit increased by 19 per cent to VND6.84 billion ($297.39 million).

In the second quarter alone, Vingroup reported a total revenue of VND39.5 trillion ($1.71 billion) and post-tax profit of VND2.3 trillion ($100 million), an up of 22.4 per cent and 218.1 per cent on-year, respectively.

GIC is showing interested in the Vietnamese market by pouring money in giant groups like Masan, Vietjet, Vinamilk, FPT, or PAN Group. GIC also invested $853 million in Vinhomes after the company’s IPO in 2018.

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