Bank to join growing group from Taiwan

Taiwan-based Shanghai Commercial & Savings Bank Ltd plans to open a representative office in Cambodia, joining an increasing number of Taiwanese banks and garment industry investors in the Kingdom.

National Bank of Cambodia director-general Nguon Sokha said yesterday that the Taipei-based privately held bank had preliminary or “in-principle” approval on May 31.

Some banks establish representative offices to test the waters before making a decision on opening an actual branch. The point is to “gather information about the Cambodian economy . . . they observe the performance, [but it is] for their own use”, she said.

Shanghai Commercial & Savings would enter a crowded sector, behind other Taiwanese-based financial intuitions. Hua Nan Commercial Bank said last month that it would open a branch in Cambodia, hoping to capitalise on the country’s high number of Taiwanese investors and high interest rates.

Cambodia has “many Taiwanese companies, especially in the shoe and garment industry”, senior manager of the bank’s international banking department, Chris Lee, told the Post last month.

In September 2011, Taiwan’s Mega International Commercial Bank opened a local branch, followed by the March  2013 entry of Taiwan Cooperative Bank. That same month, Taiwan’s E Sun Commercial Bank announced plans to acquire a 70 per cent stake in Cambodia’s Union Commercial Bank for nearly $70 million.

Shanghai Commercial & Savings did not immediately respond to a request for comment. The bank’s website says that regulators in Taiwan approved the Cambodia office in January.

A share of Taiwanese investment in Cambodia flows into the garment industry. Taiwanese-owned Sabrina Garment factory, which supplies Nike, fired hundreds of workers on Saturday following violent protests and the arrest of unionists.

Taiwanese-owned garment factories Grand Twins International (Cambodia) Plc and TY Fashion are expected to become the first foreign-owned companies to list on Cambodia’s stock exchange.

By Anne Renzenbrink and May Kunmakara │13 June 2013│The Phnom Penh Post

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Credit Suisse buys 13.64% of Hoang Anh Gia Lai

HA NOI (VNS)— Credit Suisse (Hong Kong) Limited announced it had purchased over 73.3 million shares of property developer Hoang Anh Gia Lai (HAG). The deal was for the purpose of hedging transactions it had entered into with its off-shore clients, the business said earlier this week. The amount of shares/fund certificates held by Credit Suisse Hong Kong after the transaction is equal to 13.64 per cent of Hoang Anh Gia Lai’s outstanding shares. It made Credit Suisse the second-largest shareholder after Doan Nguyen Duc, the Vietnamese company’s chairman. Before the transaction, the investor held only 12 per cent of HAG shares.-VNS

Warburg Pincus invests $200m in Vincom (Reuters)

Warburg Pincus LLC, the private-equity owner of Neiman Marcus Group Inc., will lead a consortium to invest as much as $325 million in Vietnam’s Vingroup Joint Stock Co., the firm’s first Southeast Asia deal since 2010.

The group will spend $200 million for about 20 percent of the Hanoi-based company’s Vincom Retail property unit, Vingroup said in a statement. The New York-based firm may invest an additional $100 million, Vietnam’s largest shopping mall owner said.

Warburg Pincus, which raised $11.2 billion in May, joins a wave of private-equity firms betting on the country’s emerging middle class and real estate market recovery. The deal rivals KKR & Co.’s $359 million investment in a unit of Masan Group Corp. in January and will help Vingroup accelerate planned shopping mall developments

“There’s very good chemistry between the two companies,” Le Thi Thu Thuy, Vingroup’s chief executive officer, said in an interview. “We want to leverage Warburg-Pincus’ experience and take Vingroup to the next level. We want to internationalize this company.”

Vingroup plans to offer shares in Singapore this year and Warburg Pincus will invest as much as $25 million as part of today’s agreement, she said. Vingroup also plans an international bond sale, she said, without giving a time frame.

Warburg Pincus will gain positions on Vingroup’s board of directors as part of today’s transaction, according to the statement.

KKR Deal

A fifth of private-equity investors surveyed in a Coller Capital report in December said they are turning to emerging Asian markets including Vietnam and Indonesia as investments in China become risker.

KKR in January more than doubled its stake in Masan Consumer Corp., a Vietnamese fish sauce maker, making it the country’s largest private-equity deal. TPG Capital, the private-equity firm run by David Bonderman and James Coulter, said in March it was looking for its first Vietnam investment in nearly four years.

Warburg Pincus’s only investment in Southeast Asia was in Singapore’s Quest, an engineering services company, in 2010, according to its website.

Warburg Pincus Buys Vincom Retail for US$200 mln

 May 31, 2013 (Vietnamica) — On May 29, Warburg Pincus, the consortium led by U.S. buyouts fund, unveiled its plan to buy 20 percent of Vincom Retail, the retail unit of Vietnam’s Vingroup JSC (HOSE:VIC) for US$200 million (Dan Tri, May 29).

Warburg pledged to invest more US$25 mln in Vingroup’s first initial public offering (IPO) in the international market. In the future,  an additional US$100 million will be poured in Vincom Retail for expansion and retail property-related deals.

Vincom Retail is the country’s largest owner and operator of shopping malls with seven assets valued around $1.1 billion.

On May 28 session, VIC hit ceiling price of $3.6 per share and nearly 850,000 shares were transacted (VietFin, May 29)

ThaiBev takes aim at Myanmar

Thai Beverage Plc (ThaiBev) is seeking a greater presence in Myanmar through its partnership with Fraser and Neave Ltd (F&N), the Singaporean firm acquired earlier this year by the Thai drinks giant.

Thapana Sirivadhanabhakdi, ThaiBev’s president and chief executive, said the company is also considering importing Myanmar beer into Thailand, where many migrant workers from Myanmar live.

F&N _ which was taken over by ThaiBev, led by the Thai billionaire Charoen Sirivadhanabhakdi in a deal worth S$13.8 billion (327 billion baht) _ owns a stake in Myanmar Brewery Ltd.

“Myanmar is the rising star of Asean, the one everyone is looking at, and the market there is similar to Thailand’s,” Mr Thapana said on the sidelines of last week’s Asean Economic Community (AEC) seminar in Bangkok hosted by KPMG Thailand.

“With growing income per capita, there’s a huge opportunity for consumer goods and companies such as ThaiBev. We are already a player there and can build on the partnership with F&N.”

He said investment in Myanmar production will have to wait for improved infrastructure such as electricity and water supply.

In the meantime, ThaiBev could bring Myanmar beers to the Thai market.

“We’re looking at opportunities in the Myanmar market as well as the chance of Myanmar products coming here,” said Mr Thapana.

The Myanmar government reportedly is prepared to relax limits on foreign ownership of breweries on a case-by-case basis in a bid to project a friendlier image to foreign investors.

The Myanmar Investment Commission, which oversees foreign investment, in January offered four licences for international breweries to operate domestically.

ThaiBev is one of two brewers _ Denmark’s Carlsberg being the other _ that won approval in February to set up breweries in Myanmar.

ThaiBev is allowed to produce its flagship Chang brand in Yangon, Mandalay and Shan state.

Apart from Singapore, F&N has a presence in Malaysia and Vietnam.

Mr Thapana said F&N products made in Malaysia may suit the Indonesian market better than Thailand due to the many Muslims living there who require halal products.

“ThaiBev is now on a learning curve of expanding business in the region,” he said.

“Asean is a hotspot, with growing gross domestic product. ThaiBev wants to be the leader in Thailand and the region.”

With the single market set to remove barriers, both opportunities and risks will arise.

“If you prepare yourself and are ready for greater competition, the AEC will give you the opportunity. If you are not going out, the competitors will come in anyway,” said Mr Thapana. “Small companies can also survive if they identify and develop their uniqueness.”

Taiwanese bank eyes Cambodia

Hua Nan Commercial Bank plans to become the fourth Taiwanese bank to enter Cambodia’s crowded banking sector, hoping to capitalise on the Kingdom’s high number of Taiwanese investors and high interest rates.

The Taipei-based bank plans to have its own branch in Cambodia, the senior manager of the bank’s international banking department, Chris Lee, told the Post yesterday.

Cambodia has “many Taiwanese companies, especially in the shoe and garment industry”, he said. “Compared to other ASEAN countries, it also has high interest rates [on loans],” which are good for profits.

In September 2011, Taiwan’s Mega International Commercial Bank opened in Cambodia, followed by Taiwan Cooperative Bank in March this year. That same month, the Post also reported that Taiwan’s E Sun Commercial Bank planned to acquire a 70 per cent stake in Cambodia’s Union Commercial Bank for nearly $70 million.

With 32 commercial banks currently in Cambodia, some larger banks had in earlier media reports called for consolidation to remove smaller players, as they believe that with Cambodia’s relatively small population of about 14 million, the banking industry is saturated.

According to the director-general of National Bank of Cambodia (NBC), Nguon Sokha, “NBC does not stop issuing licences to new banks” as long as they bring value to the country.

But she said, “For the time being, we promote consolidation in the banking industry by encouraging new applicants to consider partnership with the existing local banks.”

“Some of the local banks want to strengthen [their business] so it might be the case that they look for partners in Taiwan or in any other countries which they think are suitable as their business partner,” she added.

While Nguon Sokha said she was not aware of Hua Nan’s plan, generally, “not only Taiwanese banks, but many other [banks from other countries] are eyeing Cambodia, mainly due to its good performance in the last decade, macroeconomic stability, and political stability,” she said.

Hua Nan is listed on the Taiwan Stock Exchange and has branches in London, New York, Singapore, Los Angeles and Hong Kong.
The bank, a subsidiary of state-run financial service provider Hua Nan Financial Holdings Co, posted a net profit of NT$2.45 billion (US$82.1 million), in the first quarter of this year, up 62 per cent from the same period in 2012, the Taipei Time yesterday reported Hua Nan Financial president Ed Liu as saying.

By Anne Renzenbrink and Low Wei Xiang│22 May 2013│The Phnom Penh Post

PVF shareholders approve merger plan

HA NOI (VNS)— A shareholder meeting on Saturday of PetroVietnam Finance Corp (PVF) resolved that the company would merge with Western Bank to form a new institution.

The new entity was expected to have an equity of VND9 trillion (US$428.6 million) and total asset value of VND100 trillion ($4.8 billion).

Western Bank’s shareholders also approved the plan late last month, which was believed to help build an entity with adequate resources for developing banking services and major energy projects.

The two sides pledged to continue normal operations, maintain current business relations and assure the rights and interests of relevant organsations and individuals, including their customers, suppliers and agents.

PVF chairman Nguyen Dinh Lam told online newspaper VnExpress.net that the scheme was just waiting for the State Bank of Viet Nam’s approval, adding that Western Bank’s financial situation had been cleaned up although it had previously been exposed to significant bad debts.

Industry insiders said the greatest advantage of the merger bank would be the network since PVF, under the brand name of the oil and gas industry, had advantages in financing economic groups, while Western Bank had quite a large network in the Cuu Long (Mekong) Delta region.

After the merger, the 78 per cent stake which Viet Nam National Oil and Gas Group (PetroVietnam) was holding at its affiliate PVF would fall to 52 per cent at the new entity.

PetroVietnam general director Do Van Hau said the parent company would then sell more stakes to further reduce its equity in PVF following a capital withdrawal road map, but he affirmed that the group would continue to be “a firm stay” for the merger bank.

“We have over VND10 trillion ($476.2 million) deposited in a PVF account and don’t have any plans to change this amount even after the merger,” he said.

According to the law, PVF share listings would be terminated after the merger. The company’s shares are currently being traded at around VND8,500 ($0.4) on the HCM City Stock Exchange.

The equity of the new bank corresponded to 900 million shares worth VND10,000 ($0.47) each and the possibility of listing these shares on the stock market was still under consideration, according to the PVF management board.

Non-banking financial corporation PVF had planned to become a banking institution for two years and merging with Western Bank was the easiest way for it to do so.

For Western Bank, which had been facing liquidity troubles, merging with the PVF offered a means to save itself from bankruptcy, industry insiders said. — VN