Shares of Vietnam's largest conglomerate Vingroup, unit slump
FILE PHOTO: Vinhomes Central Park and Landmark 81, Vietnam's tallest building are seen from the Saigon river in Ho Chi Minh city, Vietnam June 6, 2019. REUTERS/Yen Duong/File photo
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HANOI :Shares of Vietnam's largest conglomerate Vingroup and its real estate unit Vinhomes both slid nearly 7 per cent on Thursday, after Vingroup unveiled plans to raise funds.
Traders and stock brokers said market speculation about Vingroup's plans to issue new bonds to fund the redemption of its maturing bonds may have raised concerns about its financial status.
Shares of Vingroup, the parent company of Nasdaq-listed automaker VinFast, fell 6.94 per cent to 41,600 dong ($1.69) at one point while Vinhome shares fell 6.9 per cent to 41,800 dong.
Vingroup said in a statement on Thursday it raised $250 million via an issue of five-year exchangeable bonds which will convert into shares of Vinhomes, adding that some investors sold Vinhomes shares to complete their investment in the bonds.
"The holders of the exchangeable bonds have found the buyers for most of their offered Vinhomes shares, so the impact on the market is expected to be short-lived and insignificant," Vingroup said in the statement.
Vingroup said the fundraising would be to finance general corporate purposes, including but not limited to, refinancing existing obligations
IFR reported on Wednesday, citing a term sheet, that Vingroup would use the funds to repurchase up to $300 million of its outstanding $500 million 3 per cent exchangeable bonds due April 20 2026, fund capital expenditure and for general corporate purposes. These shares were also exchangeable into ordinary shares of Vinhomes.
By 0715 GMT, Vietnam's benchmark stock index was down 4.5 per cent at 1,052, the lowest since May.
($1 = 24,603.0000 dong)