Hoang Anh Gia Lai Group (HAGL) officially issued convertible bonds worth US$57.6 million to Northbrooks Investments (Mauritius) Pte Ltd, an affiliate of Singapore investment company Temasek Holdings in Ha Noi on Tuesday.
Temasek will acquire 1,100 convertible bonds worth VND67,375 (US$3.45) each at an interest equivalent to the average rate for ACB, Sacombank, Techcombank and Eximbank, within a margin of 3 per cent.
Temasek Holdings will own about 5.29 per cent of the group and become a strategic stakeholder, said Nguyen Van Su, Director General of HAGL.
"HAGL will use the bond sale to invest in rubber plantations, mining and hydropower development in the coming years," he said.
Derek Lau, Chief Representative of Temasek Holdings in Viet Nam said: "Temasek's investment in HAGL is in line with our strategy to support companies with deepening comparative advantages and which are emerging champions in transforming economies. This investment also gives us exposure to Viet Nam's growing middle-income population".
"Asia continues to be important to Temasek. As Viet Nam is one of the fastest growing markets in the region, we will continue to seek long-term investment opportunities here," he said.
Doan Nguyen Duc, Chairman of HAGL's management board, said the group would restructure into a holding company with five affiliates focusing on rubber, mining, real estate, hydro-electricity, wood and granite production.
"The restructure is targeted at enhancing management and flexibility to mobilise more funds. HAGL has basically completed all the necessary legal procedures for restructuring to set up five corporations," Duc said.
HAGL Rubber Corporation will have six subsidiaries based in Viet Nam, Laos and Cambodia, and manage 51,000ha of rubber trees in the countries.
It is estimated that rubber investment will produce about 127,500 tonnes of latex for export and earn an annual revenue of over $382 million, Duc said.
The mining corporation now has six affiliates exploring and exploiting iron ore in Indochina, with combined reserves of some 60 million tonnes, worth an estimated revenue of $7.2 billion.
HAGL Real Estate has a portfolio of 20 projects in HCM City, Gia Lai, Da Nang and Can Tho and Bangkok. The target is to develop 2.5 million sq.m of apartments and offices in the coming years.
The HAGL Hydropower Corporation is developing 17 projects capable of generating 420 megawatts in the Central Highlands region of Viet Nam and Laos. The estimated investment capital in these projects is VND6.3 trillion (Over $323 million).
Temasek's market share reached $186 billion ($138 billion), earning a net profit of $5 billion up to the end of the fiscal year last March.
Since 2002, Temasek has been expanding its operations in Asia. This year, nearly 80 per cent of the underlying portfolio exposure was in Asia.