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Sojitz to become major shareholder of PAN Group
Once the transaction between PAN Group and Japan’s Sojitz Corporation, who spent around $91 million on acquiring a 95 per cent stake in Saigon Paper Corporation, Sojitz will become a large shareholder and strategic partner of PAN Group.
The Board of Directors of PAN Group is seeking shareholders’ approval to issue 14.86 million individual shares, equalling 11 per cent stake. If the shareholders approve, the transaction will be completed in either the third or the fourth quarter.
PAN Group will negotiate with Sojitz the selling price of the shares, but it will not be lower than VND55,000 per share.
The individual share issuance is expected to help PAN Group to attract more strategic shareholders, while simultaneously providing additional financial potential for investment and M&A activities.
Established in 1998, PAN Group is one of the leading agricultural companies in Vietnam with the total assets of VND7.6 trillion ($327 million). Singapore’s GIC, The Asian Entrepreneur Legacy (TAEL) Partners, PYN, NDH Invest, SSI, and CSC Vietnam are the major shareholders of the agricultural firm. Last year, International Finance Corporation (IFC) proposed to invest up to $10 million (VND 230 billion) into a $28 million project of Pan Group to support its expansion plans.
Sojitz, on the other hand, in June completed the purchase of 95.24 per cent of the stakes in Saigon Paper Corporation, which is the largest tissue paper and industrial paper producer nationwide, for $95 million.
Sojitz is one of the first Japanese corporations to invest in Vietnam. This corporation focuses on airport infrastructure, power, oil and gas, fertilisers, industrial park infrastructure, agricultural products (high-quality rice), and animal alimentation.
Sojitz entered into a collaboration with Indian partners to develop a $180 million paper mill in Dung Quat of Quang Ngai provinces in 2013. However, the project faced difficulties and has not been granted an investment certificate.
In 2015, the corporation moved on to Quang Ninh and proposed to develop a paper mill in Viet Hung Industrial Park with the total production capacity of 150,000 tonnes per year.
The acquisition of Saigon Paper enables Sojitz to set foot in the Vietnamese paper market quickly, capitalising on the fast-rising demand for industrial paper in the country and in China.
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