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Vinaland sells HAS project

Vinaland has sold its stake in the company that owns the HAS Project located in the central region of Quang Nam Province, Vietnam to Gold Yield Enterprises Limited, an entity of Chow Tai Fook, who will inject both equity and expertise into developing and operating the large scale hospitality and entertainment development. Since Genting’s withdrawal from the project back in 2012,  VinaCapital (the “Manager”) had been sourcing a new partner with appropriate experience to participate in this Project.

The Project is a future development site and was acquired by VNL in 2007 for development into a mixed use township incorporating residential, commercial, hospitality, leisure and gaming.   The prices was 53.5% above the unaudited 30 June 2015 net asset value of the investment and will result in net proceeds of $10.5m for VNL, and at the time of this announcement 100 percent of the proceeds have been received.

Given the complexity of the Project and the ongoing challenges it faces, the buyer has requested that VinaCapital continue to be involved in the Project.  Therefore, as part of this disposal the Manager has assumed responsibility for completing a number of conditions that remain outstanding as at the transaction date, effectively underwriting the transaction for VNL. The Manager is also obligated to purchase an additional stake of 9.36% in the Project, and will also receive an equity interest of 22.55% in return for the transfer of certain economic rights to gaming it had secured in respect to the Project.

In respect to the equity interest, VNL and the Manager will be entering into an excess return sharing deed that entitles VNL to a share of the Manager’s profits, if the Manager disposes of the stake within three years and realises a gain  exceeding 25% IRR. Although the Directors of VNL consider that likelihood that the conditions will be met is remote at the time of the announcement and the quantum of the profit share is not considered material to VNL, under the AIM Rules, a transaction between the Company and the Manager where the potential upside is uncapped constitutes a related party transaction. VNL’s Directors consider, having consulted with its nominated adviser, that the terms of the Sharing Deed are fair and reasonable insofar as its shareholders are concerned.

VNL : Vinaland sells HAS project

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