GIC and Vietcombank propose to enter into a partnership via equity investment

29-Aug-16

Singapore and Vietnam, August 29, 2016 – GIC, Singapore’s sovereign wealth fund and Joint Stock Commercial Bank for Foreign Trade of Vietnam (“Vietcombank”), announced today that both parties have entered into a memorandum of agreement for GIC to acquire a 7.73% stake on a fully enlarged basis in Vietcombank, Vietnam’s largest bank by market capitalisation.

It is proposed that GIC will purchase 305,810,895 new shares in Vietcombank. The equity investment by GIC will increase Vietcombank’s charter capital and help the bank prepare for the implementation of BASEL II as well as maintain its leading position in the Vietnamese banking sector. GIC’s investment is part of Vietcombank’s private placement of 359,777,745 new shares.

The investment will be GIC’s first significant direct investment in a commercial bank in Vietnam. GIC will also offer Vietcombank technical assistance and support.

“This investment reflects our confidence in Vietnam’s long-term growth potential. We believe with Vietcombank’s strong management team and market positioning, the bank will be able to capitalise on the strong growth trajectory of the Vietnam banking industry”, said Mr Amit Kunal, Head of Direct Investments Group for Southeast Asia, Private Equity & Infrastructure, GIC.

“Should this agreement be approved by the Governor of the State Bank of Vietnam and the Prime Minister of Vietnam, it would represent an important milestone for the long-term co-operation between GIC and Vietcombank. GIC’s strong reputation and experience will provide Vietcombank the support it needs to achieve its financial and business goals, both locally and internationally. In return, our market leadership and strong growth prospects offer GIC potential upside in its investment in Vietcombank” said Mr. Nghiem Xuan Thanh, Chairman, Vietcombank Board of Directors.

The terms and conditions of the transaction are subject to relevant regulatory authorities’ approvals, and further negotiations between both parties leading up to the signing of a share subscription agreement. The transaction is expected to be completed by the fourth quarter of 2016.

Credit Suisse acted as Placement Agent and Financial Advisor to Vietcombank on the transaction.