Sacombank Reportedly Planning 33% Stake Sale to Raise Up to US$880 Million

Sacombank Reportedly Planning 33% Stake Sale to Raise Up to US$880 Million

by May 20, 2024

Vietnamese lender Sacombank plans to sell a 33% stake by the end of the year, aiming to raise between US$840 million and US$880 million, according to DealStreetAsia.

The bank, listed in Ho Chi Minh City, intends to offer the shares at 34,500-36,000 dong (US$1.36-US$1.40) each, significantly higher than the current trading price of 28,400 dong per share.

This move values the bank at approximately 53.5 trillion dong (US$2.1 billion).

The sale faces significant hurdles due to regulatory limits on foreign ownership in Vietnamese banks, capped at 30%.

Currently, foreign investors hold more than 23% of Sacombank’s shares, including major stakeholders like Dragon Capital, which owns about 6%.

A source close to the transaction highlighted the challenge of finding domestic investors to absorb such a large share volume and the necessity for agreements with existing foreign shareholders to facilitate the sale at a favorable price.

Sacombank’s stake sale is part of its broader restructuring strategy following its 2015 merger with Southern Bank.

This merger, part of a government initiative to consolidate the banking sector, left Sacombank with significant bad debts from Southern Bank.

Since 2017, the Vietnam Asset Management Company (VAMC) has managed these non-performing loans, holding a 33% stake as collateral.

According to its April shareholder meeting report, Sacombank has largely settled its debt to VAMC and has fully provisioned for the remaining amount.

VAMC, a state agency, was created to purchase non-performing loans from local banks to prevent systemic collapse.

 

Featured image credit: Edited from Freepik