Vingroup decided to divest its entire stake in SDI Investment and Trade Development Company, thereby indirectly selling off shares and retaining only 18.8% of the capital in Vincom Retail.
Vingroup (VIC) has just announced a Board of Directors resolution approving the sale of up to 100% of the charter capital of SDI Investment and Trade Development Company Limited by the group and its subsidiaries.
SDI owns over 99% of the charter capital of Sado Trading Company, a major shareholder of Vincom Retail.
The transaction is expected to take place from March to the third quarter of 2024. After this transaction is completed, SDI, Sado, and Vincom Retail will no longer be subsidiaries of Vingroup.
Regarding the reasons for selling Vincom Retail, Mr. Nguyen Viet Quang, Vice Chairman of the Board of Directors and General Director of Vingroup, stated that this is the time to focus all resources on strongly developing Vingroup and its key brands with high growth potential. "To successfully accomplish this mission, we will dedicate all our efforts, especially financial resources, to create momentum for breakthrough development in the next pivotal phase," he said.
Mr. Quang also affirmed that there was no intention behind the "suggested mission" to acquire prime real estate in shopping malls to transform into housing projects, as some opinions suggested. "This is an unfounded and unrealistic speculation," he said.
"All shopping malls are built in accordance with the planning regulations, with the land clearly designated for commercial and service use. No one can arbitrarily demolish them to build houses, disrupting the planning of both the shopping mall site and the overall project. This is completely impossible both legally and practically," said the CEO of Vingroup.
A representative from Vingroup also stated that after the divestment, there will be no changes to the organizational, management, and operational model of Vincom Retail. Vingroup will sign a management contract with Vincom Retail, under which the group will manage the operations of the shopping malls on behalf of the company, and the rights of tenants and shop owners will remain protected.
Sado is the largest shareholder of Vincom Retail, owning over 940 million shares, equivalent to 41.5% of the charter capital. This company has held the largest stake in Vingroup's retail real estate segment since the beginning of 2021 after the merger with Nam Ha Noi Urban Business and Development Company Limited. Vingroup currently owns 18.37% of the charter capital, corresponding to 18.82% of Vincom Retail's voting rights.
Vincom Retail is the retail real estate division of Vingroup. After divesting from this segment, the conglomerate owned by billionaire Pham Nhat Vuong now has six main business areas: real estate trading and transfer, hotel, tourism and entertainment services, healthcare, education , manufacturing, and other activities.
The main contributors to Vingroup's revenue of over $6.5 billion last year were real estate and electric vehicles. Real estate business and transfers brought the group over VND 94,300 billion in revenue, nearly double that of 2022. The manufacturing segment grew even faster with over VND 28,400 billion in revenue, compared to over VND 13,000 billion the previous year.
Real estate was also the most profitable activity, with Vinhomes – the subsidiary responsible for the real estate segment – achieving a consolidated net profit of VND 33,287 billion in 2023, a 14% increase and exceeding the annual target. This figure helped offset losses in manufacturing operations.
In 2023, Vincom Retail recorded net revenue and after-tax profit of VND 9,791 billion and VND 4,409 billion respectively, an increase of 33% and 59% compared to 2022. The company currently manages 83 shopping malls in 44 provinces and cities and plans to open 6 more malls this year.
Minh Son
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