GIC-Backed Vinhomes Is Said to Target $2 Billion in Share Sale

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(Bloomberg) -- Vingroup JSC, Vietnam’s biggest developer, is targeting an initial equity offering of as much as $2 billion for its luxury residential arm, people with knowledge of the matter said.

The Hanoi-based group’s Vinhomes JSC unit is considering seeking a valuation of $13 billion to $16 billion in the share sale, according to one of the people, who asked not to be identified because the information is private. Vinhomes, which began gauging demand for the offering on Tuesday, aims to finalize a list of cornerstone investors by the end of this week, the person said.

Singapore sovereign wealth fund GIC Pte agreed to buy Vinhomes shares and extend the company a debt-like instrument in a $1.3 billion deal ahead of the planned equity offering, according to a statement on Vingroup’s website dated April 16. GIC is spending about $850 million for a 7.1 percent stake that values the luxury developer at about $12 billion, people familiar with the matter said.

A $2 billion equity offering from Vinhomes would be by far the biggest first-time share sale ever in Vietnam, data compiled by Bloomberg show. It would surpass a planned $922 million offering from Techcombank, which started taking orders last week. A deal last year from Vingroup’s mall unit Vincom Retail JSC that raised about $708 million is currently the biggest completed first-time share sale, the data show.

Vinhomes develops serviced apartments and villas in the country’s biggest cities. It may start marketing the share sale around April 27, the person said. The offering will be entirely composed of stock being sold by existing investors, according to terms for the deal obtained by Bloomberg on Tuesday. Vinhomes expects to price the offering early next month and start trading in mid-May, the terms show.

The Vingroup unit hasn’t set final terms for the deal, and details could change depending on investor feedback, the people said. A representative for GIC declined to comment beyond the statement, while a representative for Vingroup said she couldn’t comment.

Credit Suisse Group AG is among banks arranging the share sale.

Vinhomes operates 10 projects comprising nearly 18,000 apartments, villas and shophouses, according to Vingroup’s annual report. The properties include Vinhomes Royal City in Hanoi and Vinhomes Dong Khoi in Ho Chi Minh City.

©2018 Bloomberg L.P.

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