SK Group invests 410 million USD for a 16.26% stake in VinCommerce

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Fresh produce is one of the key products at VinMart and VinMart +

(ĐTCK) Masan Group Joint Stock Company (HOSE: MSN) and SK Group (SK Group) have signed an agreement on SK to buy back 16.26% of shares of VinCommerce (VCM) with Total cash value is 410 million USD.

With this transaction, VCM is valued at USD 2.5 billion for 100% equity.

Masan and SK believe in the booming growth potential of modern necessity retail in Vietnam. Modern trade channels (MT) are expected to account for 50% of the entire retail industry instead of just 8% today, making Vietnam the fastest growing MT market in the Asia-Pacific region in the next decade.

SK’s investment agreement affirms Masan’s ability to improve VCM operations and profitability: optimize store network and product portfolio, and continually improve profitability through management initiatives. Tight trade margins and cost savings.

As a result, VCM achieved breakeven EBITDA in Q4 / 2020 and positive EBITDA in Q1 / 2021. Management expects that VCM will achieve positive EBIT in the second half of 2021.

Mr. Woncheol Park, Representative Director of SK South East Asia Investment – a member company of SK Group – said: “We strongly believe in the great potential of the online – offline integrated retail (O2O) industry. VinCommerce is expected to be an important factor in promoting retail modernization.

It is proud that Masan Group has excellently improved the operations and profitability of this retail chain in such a short time. We believe that VinCommerce will become the leading O2O integrated retailer in Vietnam in the future.

SK’s investment agreement in VinCommerce is part of our strategy to invest in Vietnam’s fast growing sectors. Once again, this is a landmark transaction for SK, reaffirming our commitment to Masan Group and Vietnam”.

SK Group đầu tư 410 triệu USD cho 16,26% cổ phần tại VinCommerce ảnh 1

VinEco vegetables and fruits at VinMart

In 2021, VCM has outlined a specific plan to continue strengthening the modern necessity retail platform and delivering sustainable profit growth: improving commercial profit margins to 2.0% through signing contracts with strategic suppliers and direct source of fresh goods, implementing a model store model on a national scale before the second quarter of 2021 and upgrading the automatic supply chain model as shared at Masan’s Annual General Meeting of Shareholders on April 1, 2021.

Mr. Truong Cong Thang, Ceo of VinCommerce shared: “The investment agreement from SK Group has strongly affirmed the effectiveness of VinCommerce transformation initiatives. Over the past 12 months, VinCommerce team has been constantly s working to establish a solid foundation ready to scale nationwide to better serve the daily essential needs of 30-50 million Vietnamese consumers.

With VCM’s fulfillment of the promise of “Premium freshness”, I believe consumers will trust and choose us as a companion to retail daily necessities. VinCommerce is a passionate team with a spirit of service. I am extremely proud of VinCommerce and this is just the first step in the journey of bringing the best benefits to Vietnamese consumers every and every day.

Masan plans to use part of this investment (approximately $ 225 million) to strengthen its balance sheet and raise capital for future growth-driven initiatives.

Credit Suisse (Singapore) Limited advised Masan Group in this transaction.

Source: tinnhanhchungkhoan.vn – Translated by fintel.vn