VietNam Holding announces significant changes – VietNam Holding (VNH) has announced that it is changing its investment agreement with its existing investment manager and will increase its size by acquiring the assets of another Vietnamese listed equity fund. The company has also intends that it is to seek shareholder approval to maintain its share buy-back programme.
Investment management agreement with VietNam Holding Asset Management Limited
The company is agreed with its investment manager VietNam Holding Asset Management, a new investment management agreement but with “more appropriate fee terms”. To do this, however, the company is effectively terminating its current investment management agreement and setting up a new agreement with the same manager. Further details of how this will happen and what the agreement will contain will be released in due course. Until the new agreement is in place, the investment manager will continue operating under the terms of the current arrangement.
Acquisition of the assets of Vietnam Equity Holdings
VietNam Holding has agreed to acquire the assets of Vietnam Equity Holdings (VEH), an open-ended Cayman Islands domiciled fund investing in Vietnamese listed equities, currently managed by Saigon Asset Management.
Vietnam Equity Holdings is currently in the region of €43.6 million (c. US$ 36.5m as at 11 May 2018) in size. VietNam Holding has a market capitalisation of approximately US$193.4m.
Terms of the acquisition
- Prior to the acquisition of the portfolio, VEH will be giving its shareholders the opportunity to redeem their shares up to a maximum of 50% of their shareholding in the fund
- The asset purchase is subject to approval by VEH shareholders at a general meeting of VEH to be held on 8 June 2018
- A further announcement will be made to detail the exact value of the portfolio that has been acquired
The consideration for this acquisition is the issue of new VietNam Holding ordinary shares at a price equivalent to no less than the company’s NAV per share on the completion date, expected to be mid-June 2018.
The board of VietNam Holding believes the acquisition will benefit their shareholders by:
- VietNam Holding’s NAV per share will be enhanced by the VEH asset acquisition
- The total expense ratio of the Fund will be reduced by the VEH asset acquisition
- Increased scale of the Fund is expected to increase secondary market liquidity
Update 18 June 2018 – VEH deal will not happen
VNH announced on 16 May 2018 that it had entered into an asset purchase agreement with VEH, conditional on, inter alia, the passing of a special resolution by VEH shareholders, requiring a majority of 75% of those present and voting to vote in favour. 63% of VEH shareholders voted to approve the asset purchase resolution, and hence the threshold required to pass the special resolution to implement the scheme was not reached. The planned acquisition will therefore not take place.
VNH : VietNam Holding announces significant changes