Vinpearl JSC Raises $150 Million Through Bond Issuance
By Anh Minh
Tue, August 27, 2024 | 11:22 am GMT+7
Vinpearl JSC, a prominent player in Vietnam’s tourism and entertainment industry, has successfully raised $150 million by issuing five-year bonds in Singapore. This move is an interesting development for investors and stakeholders alike, signaling Vinpearl’s ongoing efforts to fund its ambitious growth plans.
The company sold 750 bonds, each with a par value of $200,000, maturing on August 20, 2029. This information was disclosed in a recent filing to the Hanoi Stock Exchange (HNX), which oversees Vietnam’s bond market. However, specific details regarding the bond’s coupon rate, collateral, and the intended use of the funds have not been disclosed, leaving room for speculation about the company’s future projects and investments.
Vinpearl Nha Trang entertainment complex in Nha Trang town, Khanh Hoa province, south-central Vietnam. Photo courtesy of Vinpearl.
Previous Bond Issues and Financial Performance
This recent bond issuance follows Vinpearl’s last USD-denominated bond sale in September 2021, during which the company raised $425 million from selling 2,125 five-year convertible bonds, initially set at a rate of 3.25% per annum. It’s noteworthy that Vinpearl’s financial health has taken a hit recently. In a filing to the HNX earlier this year, the company reported a net profit of VND670.6 billion (approximately $27 million) in 2023, marking an 84% decline compared to the previous year. This downturn resulted in a return on equity (ROE) of 5%, a steep drop from the 49% recorded in 2022.
Despite these challenges, the company’s owner’s equity increased significantly, rising by 57.2% year-on-year to VND13,317 billion ($535.4 million) by the end of 2023. Moreover, Vinpearl improved its leverage situation; its debt-to-equity ratio decreased from 5.61x in 2022 to 2.31x, while outstanding bonds halved to 0.94x. These metrics indicate a positive trend in financial management and a commitment to reducing debt levels.
Corporate Restructuring: A New Chapter for Vinpearl
In a significant corporate move, Vingroup, Vinpearl’s parent company, announced in November 2023 its decision to separate from Vinpearl and establish a new subsidiary named Ngoc Viet Business and Trading Joint Stock Company. This new entity will boast a charter capital of VND20.42 trillion ($841 million), with Vingroup retaining a 99.96% stake. This restructuring indicates Vingroup’s strategy to streamline operations and possibly unlock greater value within its subsidiaries.
As Vinpearl plans its future, the board of directors has set ambitious goals, including the intent to list its shares this year. This could open up new funding avenues and enhance shareholder engagement, potentially positioning Vinpearl for improved market performance.
Vinpearl’s Tourism Ventures and Expansion
Founded in 2001 with the Vinpearl Resort Nha Trang, Vinpearl has grown significantly over the years. Today, the company operates 36 hotels and resorts, offering over 18,500 rooms across 17 popular tourist destinations in Vietnam. Complementing its accommodation offerings, Vinpearl runs four amusement parks, two wildlife conservation parks, and four golf courses, making it a multifaceted player in Vietnam’s tourism landscape.
With Vietnam’s economy recovering and tourism rebounding post-pandemic, Vinpearl is well-positioned to capitalize on the growing travel demand, especially with its established reputation for providing premium travel experiences.
Vinpearl’s bond issuance and ongoing financial strategies reflect the company’s adaptability and commitment to long-term growth in a rapidly changing market. As the firm navigates its restructuring and strives to enhance its portfolio, stakeholders will certainly be keeping a close eye on Vinpearl’s next moves.