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Banks closed, businesses seek capital from investment funds
As businesses now find it difficult to access bank loans, they are seeking capital sources from non-bank financial institutions, especially investment funds.
Do Thu Ha, Director of M.A Company, said that her company can get bank loans, but only at very high interest rates. Ha said that with the current lending interest rates, businesses would only borrow money if they could make the profit of at least 35%.
Ha and her friends in the business circle are now trying to access investment funds to expand their business scale.
Ha seems to be on the right track at this very sensitive moment as investment funds are injecting money in small enterprises making consumer products instead of listed companies.
There is no official figure about the number of successful deals between small enterprises and investment funds, but sources say that tens of contracts have been inked so far this year.
Recently, MobiZ reportedly sold 30% of its stakes to Dfi VinaCapital. Prior to that, Diana sold 30% of stakes to Goldman Sachs. Mekong Enterprise Fund II committed to inject $5mil in Mai Son Joint Stock Company, and Vietnam Pan Company sold 25% of its stakes to BankInvest.
Andy Ho, Managing Director of VinaCapital, confirmed that investment funds have shifted to make investments in companies with potential instead of listed companies as they did when the stock market was hot. Ho said that 80% of VinaCapital’s investments are in these “potential” companies. Six deals have been made so far this year between VinaCapital and domestic businesses with the value of $10-20mil each deal.
However, it proves to be quite difficult for domestic businesses to seek suitable partners, though the number of investment funds in Vietnam keeps increasing. The problem is that investment funds are always fastidious, and they only shake hands with businesses that have good business strategies, good investment projects and transparent financial positions.
VNN
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