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+ Vietnam Economy Overview
+ Vietnam M&A Market
+ Opportunities
+ Difficulties
+ Investment portfolios
+ TigerInvest Introduction
+ Q & A
M & A in Vietnam – Potential & Opportunities M & A in Vietnam – Potential & Opportunities
Content
2006 2007 Aug 2008
Growth Rateannual
8.2% 8.3% Expected 5,8 - 6% forthe whole year
Interest annual 9.36 – 12.8% 14 -16% 18 - 21%
Inflation annual 7.5% 7.3% 22.14%(Aug 08)
Trade Deficitannual
US $4.8 billion US $14.1 billion US $16 billion(Aug 08)
Gold Price perTael
VND12,240,000(Dec 06)
VND16,100,000(Dec 07 )
VND17,550,000(Aug 08)
US$/VNDOfficial FXRates
15,628 -16,000
15,948 -16,026
16,645(Aug 08)
FDI annual US $10.2 billion US $20.3 billion US $47,15 billion(Aug 08)
Vietnam Economy OverviewVietnam Economy Overview
− Currency Exchange
− Interest rate
− Annual Inflation
− Trade Deficit
− FDI
− Growth Rates
− Price of Gold
− Stock Market Index
− GDP
− Price of Oil
Vietnam Economy OverviewVietnam Economy Overview
Local company’s difficulties Local company’s difficulties
• Increasing spending
• Decreasing profit
• Payment deadline of bank debt
• Affected payment ability
Sales
Biz
• Approximately 350,000 enterprises are operating in Vietnam now
+ 95% is small and medium sized companies
+ 30% of them are facing risks of bankruptcy
+ around 50,000 newly born annually which are facing many difficulties that can affect their survival• The number of equitized SOEs continuously increases
Vietnam M & A MarketVietnam M & A Market
Local company’s demandLocal company’s demand
No. Time Seller Buyer Share (%) Mil USD
1 June-07 Eximbank PVFC, ACBS, Kinh Do, Sinco… 17,8% 248
2 Aug-07 Eximbank Sumitomo Mitsui Bank 15% 225
3 June - 07 Interflour Vietnam Sojitz Corperation 20% 80
4 Jun-07 Omni Saigon Hotel Vinacapital 70% 21
5 June-07 Techcombank HSBC 20%
6 Jun - 07 Bao Minh CMG Daiichi Life Insurance 100%
7 July-2007 Hoang Quan Real estate Indochina capital 20% 20
8 2007 PVFC Morgan Stanley 10% 217
9 2007 Bien Hoa Confectionery Corp. Lotte Confectionery Co Ltd 30%
Successful M&A casesSuccessful M&A cases
No. Time Seller Buyer Share (%) Mil USD
1 Dec-07 Ninomaxx Fashion Indochina Capital Vietnam Holding 20%
2 Sep-07 Bảo Minh AXA (France) 16,6% 50tr euro
3 Jan-08 Hướng Việt securities JSCMorgan Stanley (Singapore) Holdings Pte. Ltd 48,33% 9
4 Jan-08Vietnam National Reinsurance Corporation Swiss Re 25% 81,9
5 Feb-08 VMIC Kamaz Inc 13%
6 Feb-08 Vietcombank fund management JSC Franklin Resources Inc 49%
7 Mar-08 Việt Nam securities JSC (VSEC) RHB Malaysia bank 49% 4,2
8 Mar-08 Diana JSC Goldman Sachs 30%
9 Mar-08 An Binh bank Maybank (Malaysia) 15% 200
Successful M&A casesSuccessful M&A cases
18 38113
4861
229
1753
347
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2005 2006 2007 Jun-2008
Number of cases Value (million USD)
Vietnam M&A marketVietnam M&A market
• FDI is growing rapidly (FDI: 45,2bil USD, FIDI : 600mil USD in first 7 months of 2008)
• Private economic sector grows rapidly together with the growth of capital market
• M& A activities enjoyed a boom since early 2007• From beginning of 2008, local parties’ demand for M&A is
significantly increasing• A lot of M&A transactions and value have not been disclosed• Due to the unstableness of current market, several
transactions have been delayed and value of many M&A deals have been unexpected decreased
• There’s no strategic cooperation of equitized SoEs except the deal between Carlsberg and Habeco
• Large corporations have trend to buy or merge with small and medium-sized enterprises to extend scale
CommentsComments
Your opportunitiesYour opportunities
Experience is your strength
Experience is your strength
• M& A is the shortest way to penetrate Vietnam market+ Distribution system, customers, processes, manpower…available
for use+ Reduce costs and time in starting business• Tax advantages• Opportunities of selecting, owning and running business with
suitable price• Get knowledge of market, business operation through cooperation
with a domestic partner• Achieving economies of scale, reducing employees and expenses
Profit growth.• Creating opportunities for cross-selling• Eliminating competition• Avoid entry barriers
Benefits from M&A for investors Benefits from M&A for investors
What you can do…What you can do…
Trade barriers− Local partners are not familiar with the M&A assess process
− Management boards in local private companies is lack of competence
− Financial information is not transparent and incomplete
− Price is not exact due to assessment is not based on standard method
− Foreign investors have little knowledge of local business culture
− Limited time for consideration and decision of investment
− Investment structure made by large corporation in VN is out of focus
− Investment in real estate from short-term loans is high risk
− Problems relating to tax compliance
− Problems relating to foreign exchange
Difficulties Difficulties
Regulation barriers− Unclear ownership law
− Foreign companies have no permission to set up parent company in Vietnam
− Enforcement of corporate & investment law is still ineffective
− Shortage of data and information in means of communication
− Administration procedure is complex and takes long time
Difficulties Difficulties
• Enterprise Law 2005 – Article 153• Regulations on competition law: 30% and 50%• Investment Law 2005 – recognize M & A as an important
investment method• MPI, MoF: On-going process of fully legal frame for M& A
activities
M&A activities – relating law M&A activities – relating law
M&A in Real Estate M&A in Real Estate
Investment Portfolios Investment Portfolios
Advantages:• Western corridor location• Becoming midtown-
developing area• 2 sides of road• Large area • Good Construction category
factors • Crowded street, few
commercial buildings• High grade of building• Transparent reporting• Easy for access
Commercial and Office BuildingCommercial and Office Building
Property details: • Type: Building of office for lease and rental;
Trading Centre, shopping mall, restaurants…
• Land area: 5,218 m2
• Construction area: 2,293 m2
• Construction density: 50.79%• Land utilization efficient: 13 times• Height: 35 floors plus 3 underground floors• Build up area: 83,153.7 m2• Expectation Area for lease: 55,708 m2
(excluding service area for car parking and other service: 12,177 m2)
• Location: Tay Son Street - Dong Da dist - Hanoi city
• Construction period: 3 years (excluding preparation period)
• Completion: June, 2011• Price : 60 mil VND/m2• Current status:
-Construction license: Secured-Land use right: Secured-Investment license: Secured
Commercial centre and office buildingCommercial centre and office building
Property details:
A construction company is calling for transferring a real estate project of 4,600m2 land facing to main street in Hanoi City, Cau Giay District (closed to Trung Hoa Nhan Chinh, Le Van Luong, Lang Ha street…)
I- Co-operation pattern: transfer the whole project.
II- Detail information:• Location: facing to main street of
Trung Hoa – Nhan Chinh, Cau Giay, Hanoi.
• Using purpose: Twin complex building with 25 storeys includes offices, commercial center, and apartment for sales.
• Construction density: 45%• Land utilization efficient: 10 times
Project of 4.600m2 Land facing to Main street in Hanoi Project of 4.600m2 Land facing to Main street in Hanoi
• Land area: 4,600m2
• Number of storeys: 25• Current condition: clear, available to
transfer • The advantage of project: facing to
main streets of Hanoi with good location.
• Price : 12 mil USD
Project of 4.600m2 Land facing to Main street in Hanoi
TigerInvest Presentation - 2008
Commercial and office building in downtown
Property details: • Type: Building of office for lease and rental;
Trading Centre, shopping mall, … • Land area: 3,400 m2
• Construction area: 1,750 m2
• Construction density: 51%• Land utilization efficient: 9.7 times• Height: 19 floors plus 3 underground floors• Build up area: 33,000 m2
• Expectation Area for lease: 27,000 m2
(excluding service area for car parking and other service: 10,000 m2)
• Location: Down Town- Hanoi city• Construction period: 2.5 - 3 years• Completion: June, 2010• Current status: Construction license, Land use
right, Investment license• Price : 37.7mil USD ( 12.7mil USD + 25mil
USD)
Property details: • Company owns a project of one luxury
four - star hotel in HaLong Bay. Now we would like to co-operate with investors who have strong finance and managerial skills in the same sector
• Room capacity using: 80% to 90%• Hotel capacity: located in 4,000m2, 15
floors with 101 rooms, 03 conference rooms, one big swimming pool
• Renting land: in 50 years (in used since 2003)
• Price : 12 mil USD
4 Star Hotel in Ha Long Bay4 Star Hotel in Ha Long Bay
OthersOthers
• A tea bag manufacturer ( 30% - 49% )• A securities company ( 30% - 80% )• Small Industrial zone 45 ha in Que Vo, Bac Ninh( 100% )• IT company ( system integration information ) ( 20% )• Resort ( 30% )• Power Plant ( 100% )• Urban development, 30ha next to Posco-Vinaconex project ( joint
venture )
THANKS FOR ATTENTION THANKS FOR ATTENTION