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HAG shareholders approve overseas bond issue
On Dec. 23, shareholders of the Hoang Anh Gia Lai Group, listed on the HCM City Stock Exchange as HAG, approved a plan to issue international callable bonds worth US$200 million early next year.
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| Mr. Doan Nguyen Duc - HAG Chairman |
They authorised the HAG executive board to select a suitable time for the issue.
The issue will be carried out in the Singapore Stock Exchange and listed on it later.
The issue will be underwritten by international financial services group Credit Suisse.
HAG Chairman Doan Nguyen Duc said this would be the first international bond issuance overseas by a Vietnamese private company without a guarantee from the Government of Viet Nam.
The bonds will have a five-year term but will be callable three years after the date of issue. Interest rate will be decided after the company's rating is released on January 5.
Duc said the bond issue would help his company mobilise a large amount of capital that it would find difficult to raise within Viet Nam. The international bonds issue will also enhance the group's prestige, he said.
With respect to the risk involving foreign exchange rates, Duc said he was confident that his company's receivables from rubber and iron ore, mainly in the US dollar, would minimise the risk.
He said the group plans to use US$100 million raised from the issue to restructure short and medium debts in dong, which have much higher interest rates than dollar loans. The remaining $100 million will go towards investment projects in Laos, Cambodia as well as Viet Nam. These include planting rubber trees on an additional 15,000ha in Cambodia, 25,000ha in Laos and 11,000ha in Viet Nam. Investments will also be made in two new hydropower projects in Laos and another four in Viet Nam, Duc said.
HAG expects that by 2012, it would have completed planting 51,000ha of rubber including those already under exploitation.
By the end of 2012, all of its 17 hydropower projects with a total designed capacity of 420MW will be operational.
This year HAG earned over VND3 trillion in pre-tax profits, up from the VND2.7 trillion target set for 2010. The figure is expected to rise by 20 per cent in 2011, Duc said.
HAG has recently completed a sale of 19 million shares in private placement. The New York-based Deutsche Bank Trust Company Americas acquired around 17 million, leaving the remaining 2 million shares to Saigon Securities Inc.
The shares were sold at VND72,000 a piece, generating around $70 million. Procedures are underway to turn the shares into global depository receipts for listing at the London Stock Exchange, the group said.
HAG has four main areas of operation – property, mining, rubber plantations and hydropower plants.
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