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VinaCapital Vietnam Opportunity Fund sells USD20m stake in Masan Group

The VinaCapital Vietnam Opportunity Fund, an Aim-quoted investment vehicle focused on Vietnam, has announced the sale of its entire equity stake in Masan Group, one of Vietnam’s food an

The VinaCapital Vietnam Opportunity Fund, an Aim-quoted investment vehicle focused on Vietnam, has announced the sale of its entire equity stake in Masan Group, one of Vietnam’s food and beverage companies.

Masan, established in 2003, holds a 50 per cent market share in some of Vietnam’s most competitive food product subsectors of fish, chilli and soy sauces. In the premium market, Masan holds a 70 per cent market share, with its Chinsu brand outselling foreign competitors such as Knorr and Maggi.

The sale of the equity stake was at a price 81 per cent above the book value of the position in the company’s portfolio at the time of sale. Masan shares trade on Vietnam’s over-the-counter equities market. Masan’s net profits in 2007 were USD6m and net assets were USD37m. The firm has not yet released 2008 results.

Shares of the company – as with almost all emerging market closed-end funds – are currently trading at a substantial discount of over 50 per cent to net asset value.
 
‘Masan remains in a strong market position and will record positive 2008 results, but we feel the price offered fully values the investment in the current market and is an excellent opportunity for the Vietnam Opportunity Fund to recycle capital into other investments,’ says Andy Ho, managing director of the company’s investment manager.
 
The sale will generate over USD20m, for a return over 2.5x. The position was acquired beginning in August 2006, with an additional smaller stake acquired in December 2007. The proceeds from the sale will be received in cash and booked to the company’s net asset value as calculated at the end of March 2009.
 
‘We continue to believe in the fundamental value of many of the private equity and OTC companies we hold, and the Masan exit should stand as solid evidence that the Vietnam Opportunity Fund remains able to exit mature investments at a high rate of return,’ Ho says.

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