Vietnam’s largest lender by market value Vietcombank (VCB) has secured the approval to increase its charter capital – or capital structure of a shareholding company – by 10 per cent under the private placement plan, according to an announcement by the State Bank of Vietnam (SBV) on September 19.
Under this decision, Vietcombank is allowed to increase its charter capital from VND35.977 trillion ($1.54 billion) to VND39.575 trillion ($1.7 billion). “Vietcombank is responsible for raising charter capital in accordance with the law,” the SBV said in a statement. “This decision is valid for 12 months from the signing date.”
The shares will be offered to foreign institutional investors with financial strength, which may include one or more existing shareholders of Vietcombank and no more than 10 investors.
In April, the Hanoi-based lender said, it would offload a 10 per cent stake to a maximum of 10 foreign investors in the first half of this year after it received government approval for the sale.
Earlier, the Nikkei Asian Review reported that Singaporean sovereign wealth fund GIC Private Limited was likely to become a significant shareholder in Vietcombank when the latter offloads a 10 per cent stake to foreign investors after receiving government approval.
Vietcombank Chairman Nghiem Xuan Thanh said, Japan’s Mizuho Bank, the bank’s largest foreign shareholder with a 15 per cent stake, is entitled to buy more shares to maintain its holding at the bank.
Vietcombank is one the few banks with foreign ownership of 9.12 per cent stake while the ratio in state banks is capped at 30 per cent. With the aim of increasing capital through issuing shares, the bank earlier expected to complete the transfer of 7.7 per cent stake to GIC in 2016. The deal, however, failed due to disagreement on the share price.
Not only Vietcombank, other lenders in the country are also seeking to increase their charter capital. The Bank for Investment and Development of Vietnam (BIDV) earlier announced its plans to increase its charter capital this year by 28 per cent, compared to the end of 2017.
Meanwhile, the World Bank’s International Finance Corp (IFC) is seeking a buyer for its stake in Vietnam Joint Stock Commercial Bank for Industry & Trade, the country’s third-largest lender by market value, according to Bloomberg.
According to a report on Dealstreetasia