Vietnam-focused investment firm Mekong Capital has committed to invest up to $4.5 million in Mobile World Joint Stock Company, known locally as The Gioi Di Dong, a mobile phone retail chain in Ho Chi Minh City.
The investment has been structured as a convertible loan to the company for capital expenditure and to facilitate its expansion plans. Chris Freund, managing director of Mekong, told PEO the loan is expected to be converted into equity in due course and would be subject to local regulatory approvals.
The deal, initially planned as a direct equity investment, had gained national government approval but local regulatory approval had been slow to come through, he said, explaining the decision to extend the convertible loan instead.
Mobile World was founded in 2004 and has since gained a 20 percent market share in Ho Chi Minh City, according to a statement.
Freund said he was attracted to the fact that the company’s founders and management are a group of young entrepreneurs who have worked with foreign companies in Vietnam.
The investment would be the third from Mekong Enterprise Fund II, a $50 million vehicle launched mid last year. Mekong is raising another fund aimed at capturing opportunities resulting from the privatisation of a large number of Vietnam’s state-owned companies.