ice11-mergers & acquisitions news

8/14/2019 ICE11-Mergers & Acquisitions NEWS

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UCCESS PROMOTION – COMPANY VALUE ENHANCEMENTietnam M&A News-Letter – Copyright © 2008 ICE–Enterprise Trading and International Investment Connection – Issued weekly for domesticnd foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders thisews-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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International Investment Connection and Enterprises Trading., JSC Weekly issued by ICE – M&A via email and website

&

Vietnam

wWw.ice.com.vn & wWw.ma-vietnam.com

Weekly issued to about 82.000 emails of investors, managers, and investment organizations & groups in Vietnam or overs

olunme ICE-11 , Tuesday September 30th , 2008

CE – the M & A and project investment connection is the source of useful information for domestic oreign investors, enterprise owners and corporations. M & A News issued weekly by ICE will provnformation of buying and selling enterprises in all business fields as well as investment opportunitieprojects throughout Vietnam. In addition, ICE Vietnam M & A News will help foreign investors a

enterprise owners to update new investment policies and new information of the M&A market in Vietnam

Main parts:

Part 1: M & A Investment Opportunities Part 2: Global M & A market Part 3: Vietnam and M&A Tendency- >>>Restructuring Methods ( Part 1)

M&A-51: Selling a manufacture wood private enterprise

Location Thai Binh

Business fields Manufacture floor plank

Space area 370m2 with red book

Legal documents Clear

Current status Constructed 250m2: 4-storey house,

- Manufacture and good businessincome 30 million VND/month.

- Value 3.400 billion VND includes whole equipment and workshop

Finance status Good and no tax debt

Transference form Whole transference

Transference price Negotiation

ICE’s Comment

PART 1: M & A INVESTMENT OPPORTUNITIES

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

UCCESS PROMOTION – COMPANY VALUE ENHANCEMENTietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic

nd foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-etter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A-52: Selling fashion garment trademark

Location Ho Chi Minh city

Business fields Manufacturing and business bag,

handbag, fashion clothes…

Establish year 2001

Legal documents Good

Current status - Products attractive young generation,

6 – year continuous achieves Vietnam

high quality (2003-2008)

- Whole country distribute systemincludes shops in Ho Chi Minh city and

Hanoi.

- Agency system in Can Thơ, An Giang,

Vinh Long, R ạch Gia, Nha Trang, Đa

Lạt, Qui Nhon, Hai Phong...

- Good apparatus company, special

factory (separate from company).

Finance status Clear, good business

Transference form trademark right transfer

Transference price 1.5 billion VNĐ

ICE’s Comment






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OJECT INVESTMENT OPPTUNITIES

M&A-53: Calling for investment in or transferring Hightech Concrete Factory Project

Location Dong Nai province

Total investment 220 billion VNĐ

Economic indicators of

the project

NPV : 191 billion (VND)

IRR : 24,65%

Payback Period : 7 years

Loan /Equity: 73%/27%

Project legal documents Completed and sufficient

Key strong points of the

project

Low expenses of product waterway transportation;

Large market demands, especially from shareholders;

Transference form whole transference

Transference price Negotiation

ICE’s Comment






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M&A-54: Calling for investment in or transferring Superfine stone powder manufacturing project

Location Nghe An

Business fields Mineral exploitation and processing

Total investment 5 million USD

Available legaldocuments of theproject

- CompletedIncluding:+ Mineral exploration License+ Investment License

Project land status Sufficient ( 40 years)

Planning indicators of the project

- Area of 2 mines: 5.35 ha & 7.39ha- Exploitation reserves of 2 mines: 3.262 million m3 - CaCO3 Capacity: 8.48 million m3 - Exploitation capacity: 78,000 m3 /year- Capacity supplying for the factory: 60,000 m3 / year- CaCO3 Content: >98%- Average white level: 90%

Current status of theproject Completed aggradation and construction of surrounding fencing walls

Economic indicators of the project

- NPV: 173,106 billion VND- FIRR: 33.870 %- Pay-back period: 4 years

Key strong points of theproject

- Good location, key position,- Available infrastructure.- Abundant labour with cheap labour cost. With professional education, it is easyto have skillful workers.

Co-operation forms Capital contribution

Value of Investment

invitation

40 billion VND

ICE’s Comment






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M&A-55: Calling for investment in or transferring Cement grinding factory in the Mid of Vietnam

Location Head office: Hanoi, Factory located in the Mid

Business fields Constructional materials

Total investment 17.7 million USD

Available legal

documents of the project

Completely

Project land status N/A

Planning indicators of

the project

- Land lease period : 69 years

- Area: 61 ha

- February, 2009: Completed installation of the production assembly line

- May 5th 2009: Selling product

Current status of theproject

Completed land clearance. In the process of constructing the factory Available facility import contract

Economic indicators of the project

N/A

Key strong points of theproject

Near port, and in the industrial working area with high demand for theseproduct

Co-operation forms Selling part of the project

Value of Investment Negotiation

ICE’s Comment






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Top Global M&A Deals

Target Acquiror Value ($

American International Group Inc

Federal Reserve Bank of New York 85,000

Merrill Lynch & Co Inc Bank of America Corp 44,339

HBOS Plc Lloyds TSB Group Plc 21,846

Constellation Energy Group Inc MidAmerican Energy HoldingsCo

4,725

Ciba Holding AG BASF SE 2,963

North American Businesses and Operating Assets of LehmanBrothers Holdings Inc

Barclays PLC 1,750

Semi-submersible rigs West Hercules and West Taurus Ship Finance International Ltd 1,700

Smit Internationale NV Royal Boskalis WestminsterGroep NV

1,583

Servicing Rights and Advances Related to Mortgage Loans of R&GMortgage Corp

Banco Popular de Puerto Rico 1,234

Datascope Corp Getinge AB 841.0

Industry Deals Value ($

Grand Total 9357 774,278

Financials 1608 221,91

Industrials 1951 99,260

Energy 425 89,118

Utilities 291 81,155

Healthcare 530 80,839

Basic Materials 907 79,926

Non-Cyclical Consumer Goods / Services 969 41,492

Cyclical Consumer Goods / Services 1558 40,355

Technology 944 31,616

(Source: Reut

PART 2: GLOBAL MARKET M & A

Top Industries: Global M&A




SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENTVietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic

and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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Lehman's Neuberger unit closer tosale-WSJ

(source: Reuters)

Private equity firms Bain Capital LLC and Hellman & Friedman LLC wworking on Sunday night to finish up a deal to buy Lehman BrotHoldings Inc's investment-management business, including its prNeuberger Berman division, the Wall Street Journal reported.

Citing people familiar with the situation, the Journal said a deal

been held up by issues including contract negotiations with Neubergmoney managers as well as the details of a purchase of someLehman's private-equity businesses.

According to the paper, the private equity companies would pay mless than what Neuberger and Lehman's other money-managemassets would have fetched before Lehman filed for bankruprotection. It said the deal could still fall apart.

Lehman's holding company filed for Chapter 11 bankruptcy protecearlier this month after trying to finance too many risky assets withlittle capital.

Goldman Seeks To Buy $50 Billion inAssets

(source: Reuters)

Goldman Sachs Group Inc is looking to buy up to $50 billion in asfrom troubled U.S. banks, the Financial Times reported on Sundciting executives at the bank.

The newspaper said it is looking to buy the assets as part oftransition into commercial banking.

Last Sunday, Goldman and rival Morgan Stanley said they w

become bank holding companies, enabling them to accept deposits killing the investment bank model that had dominated Wall Streetdecades.

Goldman said then that it intends to expand its deposit base by buydeposits from other banks, including those in distress.

The Financial Times said Goldman plans to talk to U.S. regulatorfind $50 billion in assets it could by from the struggling banks. Thassets would be in addition to the $150 billion of its own assets moving to its Utah industrial loan corporation, a bank regulated in

state, the report said.

The company could not be immediately reached for comment.






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Vietnam is the most prospective

development market

(Source: VNA)

“A telegram” (United Kingdom) quoted Minister of commercial

investment Lot D. Gio Nit confirms UK businessman regard “Vietnathe most prospective development market”.

Lot D. Gio Nit said that, in the future, UK will continue investmenBrazil, Russian, India, China and otherwise, UK Corporations beredirection with low cost labour market, populous, such as Vietnam.

Earlier, “UK Financial times” also confirmed Vietnam market attrinternational financial investors. This appreciation was announced rafter Vietnam Government licensed for the first foreign is HSBC Standard Chartered (UK) open branch with 100% capital is heldthem.

HSBC Vietnam provides assistance forSMEs

(Source: vovnews)

The Hong Kong and Shanghai Banking Corporation (HSBC), a leadinforeign bank in Vietnam, has introduced a special service for small-amedium-sized enterprises (SMEs).

This service package bundles financial and banking services in a singaccount, which functions as a transaction account with certain intere

rates, payment and monetary management service, foreign exchangservices, an international payment service and an account package fstaff.

Huynh Buu Quang, director of HSBC’s business finance serdepartment, said that target clients are businesses earnings anrevenue of less than US$10 million from import and export activities

At present, as many as 260,000 businesses have registered to operain Vietnam. About 95 percent of them are SMEs, which contribute abone third of the country’s GDP and generate 90 percent of new jobseach year.

The Vietnamese Government has planned to establish 320,000 newSMEs in the 2006-2010 period, achieving an average growth rate of percent annually and making up 40 percent of the country’s GDP.

The corporation has set up a special working group to support SMEs Vietnam.

Vietnam Economy

PART 3: VIETNAM AND M & A TENDENCY






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Vietnam Investment Market

Vietnam - a potential market forJapanese investors

Source: vovnews

Vietnam is a potential market for Japanese investors, said President of Tokyo Chamber of Commerce and Industry Hiro

Yoshino at a seminar entitled “Vietnam and Japan: Future challen

and opportunities” which opened in Hanoi on September 26.

Addressing the opening ceremony, President of the Vietnam Chamof Commerce and Industry, Dr Vu Tien Loc affirmed that Vietnam Japan are strategic partners and the two governments are putting place comprehensive partnership agreements.

Japan’s investment in Vietnam has continuously increased in reyears. Currently, Japan ranks third among countries investing

Vietnam with more than 1,000 on-going projects.

Deputy Minister of Planning and Investment Nguyen Chi Dung said

Japan’s projects are operating very effectively in Vietnam, leading tincrease in Japan’s investment capital in the country. Mr Dhighlighted Japanese investors’ potential and expressed hope that mand more Japanese enterprises will invest in Vietnam in such fieldthe hi-tech industry, information technology, tourism, education health services.

He also expressed belief that the advantages of Japanese Vietnamese enterprises in terms of technology, finance and busigovernance will bring huge benefits to both countries.

Philippine businesses to seek investment opportunities in Vietnam

A delegation, including 25 businesses from the Philippines, will pvisit to Vietnam from October 6-9, to seek investment opportunitie

Vietnam.

These foreign businesses are keen on agricultural and aquatic producoffee, food processing, garment, confectionary, consumer gocosmetics, packing and tourism industries.

The delegation will have a meeting directly with Vietnamese busineat the Palace Hotel, Ho Chi Minh City on October 7. Also, they will some local enterprises there that produce export goods in Vietnam

attend the Ho Chi Minh City International Furniture and Handicrafts2008 (HCMC Expo 2008).

The visit is co-organized by the Vietnamese Trade Office in Philippines, the Philippine Ministry of Trade and Industry and Investment and Trade Promotion Centre (ITPC) in HCM City.

Please contact ITPC in No 51, Dinh Tien Hoang Street, Ho Chi Minh to get more information about the Philippine delegation.






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Northwest region calls for 10 billionUSD investment

(Source: VNA)

The northwestern region needs a total investment capital of at leasbillion USD by 2010, so as to achieve the target of social and econodevelopment set by the government, according to local authori Following the scheme, the region including Lao Cai, Yen Bai, Phu T

Dien Bien, Lai Chau and Ha Giang provinces aims to ensureeconomic growth rate of 11 percent each year.

Despite the advantages in land space, natural resources and hyelectric power potential, the provinces have failed to attract forinvestors due to insufficient infrastructure and a shortage of sklabour, said Lao Cai Department of Planning and Investment direDoan Van Huong.

During the period between 1998 and 2007, the region attracted onlyforeign-invested projects worth 675 million USD. In the first months of this year, only Lao Cai and Yen Bai could attract fore

investment with Lao Cai licensing four projects valued at 73.4 miUSD and Yen Bai approving a 3.2 million USD project.

Slow land clearance, cumbersome administrative procedures and higinvestment costs than that of other locations were identified as main challenges facing the northwestern provinces in attracting fordirect investment.

Taiwan-backed auto factoryinaugurated in Dong Nai

(Source: VNA)

Taiwan ’s SanYang Industry Co. opened an automobile factory atNhon Trach 2 Industrial Zone in southern Dong Nai province on S26.Covering 33.1 ha, the factory is operated by the SanYang VietnMotor Company (SMV) with a total investment capital of 70.23 miUSD. It is capable of producing 10,000 units per year in the first ph SanYang Industry Co. (SYM) marked the occasion by introducinglatest light lorry product named SYM – T880 which is expectedreplace the home-made push-carts and handcarts currently being uacross the nation

SYM is a subsidiary company of the Chinfon Group that has soinvested more than 1 billion USD in Vietnam , focusing on cemmotorbikes, automobiles and automobile components, feed, banking services






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VIET NAM M&A MARKET

SCIC suggests negotiation-basedcapital withdrawal scheme

( Source: vneconomy)

Le Song Lai, Deputy General Director of SCIC, said that the Ministry of Finance

Le Song Lai, Deputy General Director of SCIC, said that the Miniof Finance is seeking the government’s permission to applnegotiation-based capital withdrawal scheme. Currently, capwithdrawal must be conducted through auctions.

SCIC has withdrawn capital from 45 enterprises, and the numbeenterprises is expected to be 70 by the end of 2008. The process of cawithdrawal will still depend on the market’s performance. However, SCIC pto retain its capital in 150 enterprises, while withdrawing capital from the o700. There exist some difficulties with the capital withdrawal mechanismSCIC is working with relevant ministries to settle the problems.

SCIC have learnt that SCIC has suggested a negotiation-bawithdrawal capital scheme to the Ministry of Finance.

The ministry has considered the proposal by SCIC related to the new cawithdrawal scheme and it has reported this to the government.

Negotiation-based scheme is better than the auction-based schecurrently applied?

Negotiations will help shorten the capital withdrawal process, and help selenterprises which cannot be sold by auction. You know, some enterpcould not be sold even when three auctions were organized. However, ihold negotiations, we will find suitable buyers.

If the negotiation-based scheme is approved, how can we assthat capital will not be lost?

Before conducting negotiation-based transactions, we have to hire third pa

which make independent price assessments, serving as the starting pricenegotiations with investors.Many of the enterprises have a lot of difficulties, and they have had to adtargeted growth and turnover. However, no enterprise is facing bankruptcySCIC has received a proposal to give support to the enterprises, but SCIC to say that SCIC is just a shareholder. It is really difficult to persushareholders to spend money to buy shares enterprises issue additionally ienterprises do not have feasible business plans.

How about SCIC’s capital withdrawal plan?

The State Capital Investment Corporation (SCIC) is trying to withdraw cafrom small-scale companies, the enterprises in which SCIC holds less

50% of capital, the enterprises which do not see high growth rates and dooperate in very important fields of the national economy.

How can SCIC attract investors?

The Buyers will be the staffs of enterprises and partners who are bustakes to expand their operations, foreign investors who want to becstrategic shareholders. The key is the price.





d f i i t t i d ti Pl t t ICE’ dit f M&A N t t ib t id l d thi N

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Restructuring Methods

There are several restructuring methods: doing an outright sell-off, doing an equity carve-out, spinning off a unexisting shareholders or issuing tracking stock. Each has advantages and disadvantages for companies and investAll of these deals are quite complex.

Sell-Offs

A sell-off, also known as a divestiture, is the outright sale of a company subsidiary. Normally, sell-offs are dbecause the subsidiary doesn't fit into the parent company's core strategy. The market may be undervaluingcombined businesses due to a lack of synergy between the parent and subsidiary. As a result, management andboard decide that the subsidiary is better off under different ownership.

Besides getting rid of an unwanted subsidiary, sell-offs also raise cash, which can be used to pay off debt. In the 1980s and early 1990s, corporate raiders would use debt to finance acquisitions. Then, after making a purchase would sell-off its subsidiaries to raise cash to service the debt. The raiders' method certainly makes sense if the s

of the parts is greater than the whole. When it isn't, deals are unsuccessful.

Equity Carve-Outs

More and more companies are using equity carve-outs to boost shareholder value. A parent firm makes a subsidpublic through an initial public offering (IPO) of shares, amounting to a partial sell-off. A new publicly-listed compis created, but the parent keeps a controlling stake in the newly traded subsidiary.

A carve-out is a strategic avenue a parent firm may take when one of its subsidiaries is growing faster and carrhigher valuations than other businesses owned by the parent. A carve-out generates cash because shares in subsidiary are sold to the public, but the issue also unlocks the value of the subsidiary unit and enhances the pare

shareholder value.

The new legal entity of a carve-out has a separate board, but in most carve-outs, the parent retains some controthese cases, some portion of the parent firm's board of directors may be shared. Since the parent has a controstake, meaning both firms have common shareholders, the connection between the two will likely be stro

That said, sometimes companies carve-out a subsidiary not because it's doing well, but because it is a burden. San intention won't lead to a successful result, especially if a carved-out subsidiary is too loaded with debt or trouble even when it was a part of the parent and is lacking an established track record for growing revenues profits.

Carve-outs can also create unexpected friction between the parent and subsidiary. Problems can arise as manag

of the carved-out company must be accountable to their public shareholders as well as the owners of the pacompany. This can create divided loyalties…

(Source: ICE Collect

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