GIC Pte reached a preliminary agreement to pay less than $400 million for a 7.7 percent stake in Bank for Foreign Trade of Vietnam JSC, the nation’s second-biggest listed company, people with knowledge of the matter said.
The Singapore sovereign fund will buy Vietcombank stock at a discount to the current market price, the people said, asking not to be identified because the information is private. GIC signed a memorandum of agreement to purchase 305.8 million new shares of Vietcombank, part of a private placement of 359.8 million shares, it said in an e-mailed statement Monday.
GIC, which manages Singapore’s foreign reserves, said in July that emerging economies are offering better opportunities for investors compared with last year. Chief Investment Officer Lim Chow Kiat said it is targeting “equity type” investments for higher returns given the subdued global economic outlook.
The deal, which is subject to regulatory approvals and further negotiations, is expected to be completed by the fourth quarter, according to Monday’s statement. Vietcombank, with a market value of $6.9 billion, plans to let Mizuho Financial Group Inc. buy additional stock to maintain its 15 percent holding, Vietcombank Chief Executive Officer Pham Quang Dung said by phone after the signing.
GIC will offer technical assistance to Vietcombank, the statement shows. Representatives for GIC and Vietcombank declined to comment.
Shares of Vietcombank have risen 31 percent this year, outpacing the 16 percent gain in the benchmark VN Index. The lender sold a 15 percent stake to Mizuho for 11.8 trillion dong ($529 million) in January 2012, according to data compiled by Bloomberg.
GIC has been active in Southeast Asia, agreeing in February to spend 5.2 trillion rupiah ($392 million) for a minority stake in the retail arm of Indonesian billionaire Chairul Tanjung’s CT Corp. The sovereign fund and Century Pacific Group Inc. said in March they would buy International Family Food Services Inc., operator of the Shakey’s pizza chain in the Philippines, for an undisclosed amount.
Credit Suisse Group AG advised Vietcombank on the deal, according to Monday’s statement.