Vingroup will divest from Vincom Retail

Vingroup decided to divest all of its ownership in SDI Investment and Trade Development Company, thereby indirectly selling shares and only holding 18.8% of capital at Vincom Retail.

Vingroup Corporation (VIC) has just announced the Board of Directors' Resolution approving that the corporation and its subsidiaries will sell up to 100% of the charter capital in SDI Investment and Trade Development Company Limited.

SDI is a company that owns over 99% of the charter capital of Sado Trading Company - a major shareholder of Vincom Retail.

The transaction is expected to take place from March to the third quarter of 2024. After the transaction is completed, SDI, Sado and Vincom Retail will no longer be subsidiaries of Vingroup.

Regarding the reason for selling Vincom Retail, Mr. Nguyen Viet Quang, Vice Chairman of the Board of Directors and General Director of Vingroup, said that this is the time to focus all resources to strongly develop Vingroup and key brands with high growth potential. "To fulfill this mission, we will focus all our efforts, especially financial resources, to create momentum for breakthrough development in the next turning point," he said.

Mr. Quang also affirmed that there is no story behind the "aforementioned mission" is the move to seize "golden land" of commercial centers to turn into housing projects as some opinions. "This is a baseless and unrealistic speculation," he said.

"The shopping malls are all built according to the planning with a clear purpose of commercial service land. No one can arbitrarily demolish and build houses, breaking the planning of both the land for the shopping mall and the entire project. This is completely impossible legally and practically," said the Vingroup CEO.

Vingroup representative also said that after divestment, there will be no change in the organizational, management and operational model of Vincom Retail. Vingroup will sign a management contract with Vincom Retail, according to which the group will manage the operations of the shopping centers on its behalf, while the interests of tenants and stall owners will still be guaranteed.

Sado is the largest shareholder of Vincom Retail, owning more than 940 million shares, equivalent to 41.5% of the charter capital. This enterprise has held the largest stake in the company in charge of Vingroup's retail real estate sector since the beginning of 2021 after merging with Nam Ha Noi Urban Development and Trading Company Limited. Vingroup currently owns 18.37% of the charter capital, equivalent to 18.82% of Vincom Retail's voting rights.

Vincom Retail is the unit in charge of Vingroup's retail real estate sector. After divesting here, billionaire Pham Nhat Vuong's group still has 6 main business segments, including real estate trading and transfer, hotel - tourism - entertainment services, healthcare, education, manufacturing and other activities.

The main contributors to Vingroup's revenue of more than 6.5 billion USD last year were the real estate and electric vehicle segments. Real estate trading and transfer brought the group more than 94,300 billion VND in revenue, nearly double that of 2022. The manufacturing segment grew even higher with more than 28,400 billion VND in revenue, compared to more than 13,000 billion VND last year.

Real estate is also the most profitable activity, with Vinhomes' consolidated net profit in 2023 - a subsidiary in charge of the real estate sector - reaching VND33,287 billion, up 14% and exceeding the annual plan. This figure helps offset production activities, which are currently suffering losses.

In 2023, Vincom Retail recorded net revenue and after-tax profit of VND9,791 billion and VND4,409 billion, up 33% and 59% compared to 2022. The company currently manages 83 shopping malls in 44 provinces and cities and plans to open 6 more malls this year.

Minh Son