VinaCapital, a fund manager based in Ho Chi Minh City, has invested $11 million in Tasco, a toll road operator and real estate developer in northern Vietnam, via a private placement.
Tasco’s private placement raised a total of $23 million by issuing 21 percent of post-investment common shares to several investors, including company management. VinaCapital’s flagship fund, Vietnam Opportunity Fund, is the largest investor in the private placement.
VOF is buying shares in Hanoi-listed Tasco for 10,500 Vietnamese dongs ($0.462; €0.391) each – lower than the current market price of 11,800 Vietnamese dongs. Tasco’s market capitalisation at the current market price stands at $124 million. The firm is expected to grow revenue and net profit by 32 percent and 15 percent respectively during 2017, VinaCapital added.
“The private placement gave us the opportunity to acquire a meaningful stake at an attractive price in a company that has a long track record of results and a strong pipeline,” said Andy Ho, chief investment officer of VinaCapital and managing director of VOF.
Proceeds will be used to fund Tasco’s future infrastructure and real estate projects, VinaCapital disclosed in a filing with the London Stock Exchange. Tasco currently has four toll roads in operation and expects to bring another project into operation this year. The road portfolio is worth $220 million, VinaCapital said.
The company also noted that Tasco can receive land in desirable locations in exchange for the value of the infrastructure it builds under the build-transfer model. Therefore, Tasco has significant holdings in prime locations in and around Hanoi, while it also builds projects under the build-operate-transfer model.
VOF, which is a closed-ended fund trading on the London Stock Exchange’s main market, invests in a diversified range of businesses in Vietnam.