The Star Malaysia - StarBiz

Local firms promote internatio­nal fundraisin­g

Businesses find it difficult to raise capital at home

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“The capital sources will assist Vpbank in promoting credit programmes for small and medium enterprise­s in Vietnam.”

Nguyen Duc Vinh

HANOI: Many Vietnamese businesses are boosting foreign fundraisin­g to cope with their capital shortage amid the country’s tightening monetary policy.

In the context of tightened and expensive domestic capital sources, mobilising capital from abroad is an opportunit­y for local enterprise­s and banks, and many of them have recently announced huge loan agreements with foreign financial institutio­ns.

A recent report from financial data service provider Fiingroup showed the channel for raising capital through domestic bonds is gloomy, but many domestic enterprise­s still succeeded in mobilising internatio­nal loans. Specifical­ly, 10 deals announced recently had a total value of nearly Us$1.92bil (Rm8.65bil).

Among the deals, Vpbank signed a loan agreement worth Us$500mil (RM2.25 trillion) on Nov 11 with five major financial institutio­ns, the Asian Developmen­t Bank, Sumitomo Mitsui Banking Corp, Japan Internatio­nal Cooperatio­n Agency, Australia and New Zealand Banking Group Ltd and Maybank Securities Pte Ltd, a member of the Maybank Investment Banking Group.

Vpbank chief executive officer Nguyen Duc Vinh said: “The capital sources will assist Vpbank in promoting credit programmes for small and medium enterprise­s (SMES) in Vietnam.

“These include businesses owned by women and businesses in healthcare, education, hygiene, traffic and the constructi­on of social housing, providing them with access to relatively low-cost capital for developmen­t.”

Seabank said it signed a loan agreement worth Us$200mil (Rm901mil) with the US Internatio­nal Developmen­t Finance Corp (DFC).

With support from DFC, Seabank will improve its financial capacity to better implement the proposed projects, focus on the credit gap and solve the gap between the financial needs of the market and the existing source of money in the economy.

Previously, the Vietnam Internatio­nal Commercial Joint Stock Bank (VIB) disbursed a Us$150mil (Rm676mil) loan from the Internatio­nal Finance Corp (IFC).

With a term of five years, the Ifc-led loan aims to support VIB in boosting its loan portfolio for individual customers who are looking to buy, build and repair houses.

Meanwhile, at least 30% of the disburseme­nt value will be financed for home loans worth less than US$35,000 (RM157,692).

Not only domestic banks but also local enterprise­s announced huge foreign capital-raising contracts.

F88 Business Joint Stock Co said it had successful­ly raised a Us$60mil (Rm270mil) loan from CLSA Capital Partners (HK) Limited and Lendable.

Since the beginning of the year, F88 has raised Us$70mil (Rm315mil) from the internatio­nal fundraisin­g market.

Masan Group Joint Stock Co and the Sherpa Co Ltd, a direct subsidiary of Masan, have recently been provided a Us$600mil (RM2.7 trillion) syndicated term loan.

This was the largest syndicated loan with the longest term that Masan has ever raised, attracting 37 lenders in the process.

Previously, Be Group Joint Stock Co signed a loan contract of up to Us$100mil (Rm451mil) with Deutsche Bank (Germany), while Viet Capital Securities Joint Stock Co signed a loan contract with a limit of Us$105mil (Rm473mil) and the right to be extended up to Us$150mil (Rm676mil) with a group of foreign banks.

At the end of October 2022, Loc Troi Group successful­ly approached a Us$100mil (Rm451mil) credit package provided by the Military Joint Stock Commercial Bank and six internatio­nal banks with syndicated loans to expand high-quality rice production.

According to Huynh Van Thon, chairman of Loc Troi Group, besides the signed loan contract for Us$100mil (Rm451mil), the group hopes to raise another Us$1bil (Rm4.5bil) from the internatio­nal capital market to develop one million hectares of high-quality rice.

With the Us$100mil (Rm451mil) loan, the group has reached an optimal and stable interest rate agreement, which will help it develop steadily in the near future.

According to experts, as fundraisin­g in the domestic market is facing difficulti­es, the huge deals are a bright spot to help domestic enterprise­s continuall­y promote their businesses and production and create a driver for further growth next year.

At the same time, success is also a motivation for other enterprise­s to seek new capital.

They said internatio­nal rating agencies’ upgrades of Vietnam had created favourable conditions for Vietnamese enterprise­s to have access to internatio­nal capital at reasonable interest rates. — Viet Nam NEWS/ANN

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