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Vietnam: Dragon Capital, VinaCapital pick 30% of FPT Retail

Deal Street Asia 2017-08-11 19:42:36

Vietnamese tech conglomerate has offloaded 30 per cent equity interest in its FPT Digital Retail JSC subsidiary to two asset managers, and , it announced on Friday.

Meanwhile, VinaCapital also said in its own statement that the mobile device distributor was selling 35 per cent shares to a few institutional investors. That makes VinaCapital’s Vietnam Opportunity Fund (VOF) and Dragon Capital the largest buyers in this financing.

VOF said, it invested $11 million in FPT Retail. Prior to this transaction, the fund also invested $11 million in infrastructure and real estate firm .

As part of the conditions of the sale, FPT Group has committed to listing the retail unit on the stock market, VinaCapital said.

“The consumer sector is one our favourites, and Vietnamese people have shown a huge appetite for mobile phones and accessories, which is their primary tool to communicate and access the internet. This transaction enables us to make a meaningful investment in a premier, unlisted company,” said Andy Ho, CIO of VinaCapital and managing director of VOF.

Vietnam’s $110 billion retail market is one of the most lucrative in the world, and the growth of mobile phones and technology gadgets sales has been tremendous, highlighted Vu Huu Dien, Dragon Capital’s CIO.

FPT has put its retail unit up for sale for quite a long time, and rumours had it that , the largest Vietnamese mobile device retailer, showed great interest.

While The Gioi Di Dong (Mobile World) will be instead acquiring smaller competitor Tran Anh Digital World and did not take bids in FPT Retail, Dragon Capital is a major shareholder at Mobile World with its funds and affiliates collectively holding a 10.16 per cent stake as of July 31.

Dragon Capital is at the same time an investor in FPT Corporation and has several partnerships with the tech major.

FPT Retail is currently the second largest mobile device retailer in Vietnam with 14 per cent market share from 438 stores nationwide.

In the first six months of 2017, the business has delivered revenue of VND6.2 trillion ($273.12 million), up 31 per cent year-on-year, and profit before tax of VND141 billion, up 44 per cent.

It expect to reach 27.5 per cent and 40 per cent increases in terms of revenue and profit before tax for this fiscal year.