Ice11-mergers & Acquisitions News

Vietnam

International Investment Connection and Enterprises Trading., JSC

Weekly issued by ICE – M&A via email and website

&

wWw.ice.com.vn & wWw.ma-vietnam.com

Weekly issued to about 82.000 emails of investors, managers, and investment organizations & groups in Vietnam or overseas

Volunme ICE-11, Tuesday September 30th, 2008 ICE – the M & A and project investment connection is the source of useful information for domestic and foreign investors, enterprise owners and corporations. M & A News issued weekly by ICE will provide information of buying and selling enterprises in all business fields as well as investment opportunities in projects throughout Vietnam. In addition, ICE Vietnam M & A News will help foreign investors and enterprise owners to update new investment policies and new information of the M&A market in Vietnam. Main parts: Part 1: M & A Investment Opportunities Part 2: Global M & A market Part 3: Vietnam and M&A Tendency>>>Restructuring Methods ( Part 1)

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PART 1: M & A INVESTMENT OPPORTUNITIES M&A-51: Selling a manufacture wood private enterprise Location Business fields

Thai Binh Manufacture floor plank

Space area

370m2 with red book

Legal documents

Clear

Current status

Constructed 250m2: 4-storey house, - Manufacture and good business income 30 million VND/month. - Value 3.400 billion VND includes whole equipment and workshop

Finance status

Good and no tax debt

Transference form

Whole transference

Transference price

Negotiation

ICE’s Comment SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE–Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-52: Selling fashion garment trademark

Location

Ho Chi Minh city

Business fields

Manufacturing and business bag, handbag, fashion clothes…

Establish year

2001

Legal documents

Good

Current status

- Products attractive young generation, 6 – year continuous achieves Vietnam high quality (2003-2008) -

Whole country distribute system

includes shops in Ho Chi Minh city and Hanoi. - Agency system in Can Thơ, An Giang, Vinh Long, Rạch Gia, Nha Trang, Đa Lạt, Qui Nhon, Hai Phong... - Good apparatus company, special factory (separate from company).

Finance status Transference form Transference price

Clear, good business trademark right transfer 1.5 billion VNĐ

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PROJECT INVESTMENT OPPTUNITIES

M&A-53: Calling for investment in or transferring Hightech Concrete Factory Project

Location

Dong Nai province

Total investment

220 billion VNĐ

Economic indicators of

NPV : 191 billion (VND)

the project

IRR : 24,65% Payback Period : 7 years Loan /Equity: 73%/27%

Project legal documents Key strong points of the

Completed and sufficient Low expenses of product waterway transportation;

project

Large market demands, especially from shareholders;

Transference form

whole transference

Transference price

Negotiation

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

Page 3

M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-54: Calling for investment in or transferring Superfine stone powder manufacturing project

Location

Nghe An

Business fields

Mineral exploitation and processing

Total investment

5 million USD

Available legal documents of the project

- Completed Including: + Mineral exploration License + Investment License

Project land status

Sufficient ( 40 years)

Planning indicators of the project

-

Area of 2 mines: 5.35 ha & 7.39ha Exploitation reserves of 2 mines: 3.262 million m3 CaCO3 Capacity: 8.48 million m3 Exploitation capacity: 78,000 m3 /year Capacity supplying for the factory: 60,000 m3/ year CaCO3 Content: >98% Average white level: 90%

Current status of the project

Completed aggradation and construction of surrounding fencing walls

Economic indicators of the project

- NPV: 173,106 billion VND - FIRR: 33.870 % - Pay-back period: 4 years

Key strong points of the project

- Good location, key position, - Available infrastructure. - Abundant labour with cheap labour cost. With professional education, it is easy to have skillful workers.

Co-operation forms

Capital contribution

Value of Investment

40 billion VND

invitation ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-55: Calling for investment in or transferring Cement grinding factory in the Mid of Vietnam

Location

Head office: Hanoi, Factory located in the Mid

Business fields

Constructional materials

Total investment

17.7 million USD

Available legal

Completely

documents of the project Project land status

N/A

Planning indicators of

- Land lease period : 69 years

the project

- Area: 61 ha - February, 2009: Completed installation of the production assembly line - May 5th 2009: Selling product

Current status of the project

Completed land clearance. In the process of constructing the factory Available facility import contract

Economic indicators of the project

N/A

Key strong points of the project

Near port, and in the industrial working area with high demand for these product

Co-operation forms

Selling part of the project

Value of Investment

Negotiation

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 2: GLOBAL MARKET M & A Top Global M&A Deals Target

Acquiror

Value ($M)

American International Group Inc

Federal Reserve Bank of New York

85,000.0

Merrill Lynch & Co Inc

Bank of America Corp

44,339.7

HBOS Plc

Lloyds TSB Group Plc

21,846.8

Constellation Energy Group Inc

MidAmerican Energy Holdings Co

4,725.8

Ciba Holding AG

BASF SE

2,963.3

North American Businesses and Operating Assets of Lehman Brothers Holdings Inc

Barclays PLC

1,750.0

Semi-submersible rigs West Hercules and West Taurus

Ship Finance International Ltd

1,700.0

Smit Internationale NV

Royal Boskalis Westminster Groep NV

1,583.7

Servicing Rights and Advances Related to Mortgage Loans of R&G Mortgage Corp

Banco Popular de Puerto Rico

1,234.0

Datascope Corp

Getinge AB

841.0

Top Industries: Global M&A

Industry

Deals

Value ($M)

Grand Total

9357

774,278.0

Financials

1608

221,917.0

Industrials

1951

99,260.0

Energy

425

89,118.1

Utilities

291

81,155.5

Healthcare

530

80,839.4

Basic Materials

907

79,926.0

Non-Cyclical Consumer Goods / Services

969

41,492.7

Cyclical Consumer Goods / Services

1558

40,355.5

Technology

944

31,616.7

(Source: Reuters) SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION Lehman's Neuberger unit closer to sale-WSJ

Private equity firms Bain Capital LLC and Hellman & Friedman LLC were working on Sunday night to finish up a deal to buy Lehman Brothers Holdings Inc's investment-management business, including its prized Neuberger Berman division, the Wall Street Journal reported. Citing people familiar with the situation, the Journal said a deal has been held up by issues including contract negotiations with Neuberger's money managers as well as the details of a purchase of some of Lehman's private-equity businesses.

According to the paper, the private equity companies would pay much less than what Neuberger and Lehman's other money-management (source: Reuters) assets would have fetched before Lehman filed for bankruptcy protection. It said the deal could still fall apart. Lehman's holding company filed for Chapter 11 bankruptcy protection earlier this month after trying to finance too many risky assets with too little capital.

Goldman Seeks To Buy $50 Billion in Assets

Goldman Sachs Group Inc is looking to buy up to $50 billion in assets from troubled U.S. banks, the Financial Times reported on Sunday, citing executives at the bank. The newspaper said it is looking to buy the assets as part of its transition into commercial banking. Last Sunday, Goldman and rival Morgan Stanley said they would become bank holding companies, enabling them to accept deposits and killing the investment bank model that had dominated Wall Street for decades. Goldman said then that it intends to expand its deposit base by buying deposits from other banks, including those in distress.

(source: Reuters) The Financial Times said Goldman plans to talk to U.S. regulators to find $50 billion in assets it could by from the struggling banks. Those assets would be in addition to the $150 billion of its own assets it is moving to its Utah industrial loan corporation, a bank regulated in that state, the report said. The company could not be immediately reached for comment.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 3: VIETNAM AND M & A TENDENCY Vietnam Economy Vietnam is the most prospective development market

“A telegram” (United Kingdom) quoted Minister of commercial and investment Lot D. Gio Nit confirms UK businessman regard “Vietnam is the most prospective development market”.

Lot D. Gio Nit said that, in the future, UK will continue investment in (Source: VNA) Brazil, Russian, India, China and otherwise, UK Corporations begins redirection with low cost labour market, populous, such as Vietnam. Earlier, “UK Financial times” also confirmed Vietnam market attracts international financial investors. This appreciation was announced right after Vietnam Government licensed for the first foreign is HSBC and Standard Chartered (UK) open branch with 100% capital is held by them.

HSBC Vietnam provides assistance for SMEs

(Source: vovnews)

The Hong Kong and Shanghai Banking Corporation (HSBC), a leading foreign bank in Vietnam, has introduced a special service for small-andmedium-sized enterprises (SMEs). This service package bundles financial and banking services in a single account, which functions as a transaction account with certain interest rates, payment and monetary management service, foreign exchange services, an international payment service and an account package for staff. Huynh Buu Quang, director of HSBC’s business finance service department, said that target clients are businesses earnings annual revenue of less than US$10 million from import and export activities. At present, as many as 260,000 businesses have registered to operate in Vietnam. About 95 percent of them are SMEs, which contribute about one third of the country’s GDP and generate 90 percent of new jobs each year. The Vietnamese Government has planned to establish 320,000 new SMEs in the 2006-2010 period, achieving an average growth rate of 22 percent annually and making up 40 percent of the country’s GDP. The corporation has set up a special working group to support SMEs in Vietnam.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

Vietnam Investment Market Vietnam - a potential market for Japanese investors

Vietnam is a potential market for Japanese investors, said Vice President of Tokyo Chamber of Commerce and Industry Hiroyuki Yoshino at a seminar entitled “Vietnam and Japan: Future challenges and opportunities” which opened in Hanoi on September 26.

Addressing the opening ceremony, President of the Vietnam Chamber of Commerce and Industry, Dr Vu Tien Loc affirmed that Vietnam and Japan are strategic partners and the two governments are putting into Source: vovnews place comprehensive partnership agreements. Japan’s investment in Vietnam has continuously increased in recent years. Currently, Japan ranks third among countries investing in Vietnam with more than 1,000 on-going projects. Deputy Minister of Planning and Investment Nguyen Chi Dung said that Japan’s projects are operating very effectively in Vietnam, leading to an increase in Japan’s investment capital in the country. Mr Dung highlighted Japanese investors’ potential and expressed hope that more and more Japanese enterprises will invest in Vietnam in such fields as the hi-tech industry, information technology, tourism, education and health services. He also expressed belief that the advantages of Japanese and Vietnamese enterprises in terms of technology, finance and business governance will bring huge benefits to both countries.

Philippine businesses to seek investment opportunities in Vietnam

A delegation, including 25 businesses from the Philippines, will pay a visit to Vietnam from October 6-9, to seek investment opportunities in Vietnam. These foreign businesses are keen on agricultural and aquatic products, coffee, food processing, garment, confectionary, consumer goods, cosmetics, packing and tourism industries. The delegation will have a meeting directly with Vietnamese businesses at the Palace Hotel, Ho Chi Minh City on October 7. Also, they will visit some local enterprises there that produce export goods in Vietnam and attend the Ho Chi Minh City International Furniture and Handicrafts Fair 2008 (HCMC Expo 2008). The visit is co-organized by the Vietnamese Trade Office in the Philippines, the Philippine Ministry of Trade and Industry and the Investment and Trade Promotion Centre (ITPC) in HCM City. Please contact ITPC in No 51, Dinh Tien Hoang Street, Ho Chi Minh City to get more information about the Philippine delegation.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

Northwest region calls for 10 billion USD investment

The northwestern region needs a total investment capital of at least 10 billion USD by 2010, so as to achieve the target of social and economic development set by the government, according to local authorities.

Following the scheme, the region including Lao Cai, Yen Bai, Phu Tho, (Source: VNA) Dien Bien, Lai Chau and Ha Giang provinces aims to ensure an economic growth rate of 11 percent each year. Despite the advantages in land space, natural resources and hydroelectric power potential, the provinces have failed to attract foreign investors due to insufficient infrastructure and a shortage of skilled labour, said Lao Cai Department of Planning and Investment director Doan Van Huong. During the period between 1998 and 2007, the region attracted only 92 foreign-invested projects worth 675 million USD. In the first nine months of this year, only Lao Cai and Yen Bai could attract foreign investment with Lao Cai licensing four projects valued at 73.4 million USD and Yen Bai approving a 3.2 million USD project. Slow land clearance, cumbersome administrative procedures and higher investment costs than that of other locations were identified as the main challenges facing the northwestern provinces in attracting foreign direct investment.

Taiwan-backed auto factory inaugurated in Dong Nai

Taiwan ’s SanYang Industry Co. opened an automobile factory at the Nhon Trach 2 Industrial Zone in southern Dong Nai province on Sept. 26. Covering 33.1 ha, the factory is operated by the SanYang Vietnam Motor Company (SMV) with a total investment capital of 70.23 million (Source: VNA) USD. It is capable of producing 10,000 units per year in the first phase. SanYang Industry Co. (SYM) marked the occasion by introducing its latest light lorry product named SYM – T880 which is expected to replace the home-made push-carts and handcarts currently being used across the nation SYM is a subsidiary company of the Chinfon Group that has so far invested more than 1 billion USD in Vietnam , focusing on cement, motorbikes, automobiles and automobile components, feed, and banking services

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION VIET NAM M&A MARKET SCIC suggests negotiation-based capital withdrawal scheme

Le Song Lai, Deputy General Director of SCIC, said that the Ministry of Finance is seeking the government’s permission to apply a negotiation-based capital withdrawal scheme. Currently, capital withdrawal must be conducted through auctions. SCIC has withdrawn capital from 45 enterprises, and the number of enterprises is expected to be 70 by the end of 2008. The process of capital withdrawal will still depend on the market’s performance. However, SCIC plans to retain its capital in 150 enterprises, while withdrawing capital from the other 700. There exist some difficulties with the capital withdrawal mechanism and SCIC is working with relevant ministries to settle the problems. SCIC have learnt that SCIC has suggested a negotiation-based withdrawal capital scheme to the Ministry of Finance.

Le Song Lai, Deputy General Director of SCIC, said that the Ministry of Finance

( Source: vneconomy)

The ministry has considered the proposal by SCIC related to the new capital withdrawal scheme and it has reported this to the government. Negotiation-based scheme is better than the auction-based scheme currently applied? Negotiations will help shorten the capital withdrawal process, and help sell the enterprises which cannot be sold by auction. You know, some enterprises could not be sold even when three auctions were organized. However, if we hold negotiations, we will find suitable buyers. If the negotiation-based scheme is approved, how can we assure that capital will not be lost? Before conducting negotiation-based transactions, we have to hire third parties which make independent price assessments, serving as the starting prices in negotiations with investors. Many of the enterprises have a lot of difficulties, and they have had to adjust targeted growth and turnover. However, no enterprise is facing bankruptcy. SCIC has received a proposal to give support to the enterprises, but SCIC have to say that SCIC is just a shareholder. It is really difficult to persuade shareholders to spend money to buy shares enterprises issue additionally if the enterprises do not have feasible business plans. How about SCIC’s capital withdrawal plan? The State Capital Investment Corporation (SCIC) is trying to withdraw capital from small-scale companies, the enterprises in which SCIC holds less than 50% of capital, the enterprises which do not see high growth rates and do not operate in very important fields of the national economy. How can SCIC attract investors? The Buyers will be the staffs of enterprises and partners who are buying stakes to expand their operations, foreign investors who want to become strategic shareholders. The key is the price.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

Restructuring Methods There are several restructuring methods: doing an outright sell-off, doing an equity carve-out, spinning off a unit to existing shareholders or issuing tracking stock. Each has advantages and disadvantages for companies and investors. All of these deals are quite complex. Sell-Offs A sell-off, also known as a divestiture, is the outright sale of a company subsidiary. Normally, sell-offs are done because the subsidiary doesn't fit into the parent company's core strategy. The market may be undervaluing the combined businesses due to a lack of synergy between the parent and subsidiary. As a result, management and the board decide that the subsidiary is better off under different ownership. Besides getting rid of an unwanted subsidiary, sell-offs also raise cash, which can be used to pay off debt. In the late 1980s and early 1990s, corporate raiders would use debt to finance acquisitions. Then, after making a purchase they would sell-off its subsidiaries to raise cash to service the debt. The raiders' method certainly makes sense if the sum of the parts is greater than the whole. When it isn't, deals are unsuccessful. Equity Carve-Outs More and more companies are using equity carve-outs to boost shareholder value. A parent firm makes a subsidiary public through an initial public offering (IPO) of shares, amounting to a partial sell-off. A new publicly-listed company is created, but the parent keeps a controlling stake in the newly traded subsidiary. A carve-out is a strategic avenue a parent firm may take when one of its subsidiaries is growing faster and carrying higher valuations than other businesses owned by the parent. A carve-out generates cash because shares in the subsidiary are sold to the public, but the issue also unlocks the value of the subsidiary unit and enhances the parent's shareholder value. The new legal entity of a carve-out has a separate board, but in most carve-outs, the parent retains some control. In these cases, some portion of the parent firm's board of directors may be shared. Since the parent has a controlling stake, meaning both firms have common shareholders, the connection between the two will likely be strong. That said, sometimes companies carve-out a subsidiary not because it's doing well, but because it is a burden. Such an intention won't lead to a successful result, especially if a carved-out subsidiary is too loaded with debt or had trouble even when it was a part of the parent and is lacking an established track record for growing revenues and profits. Carve-outs can also create unexpected friction between the parent and subsidiary. Problems can arise as managers of the carved-out company must be accountable to their public shareholders as well as the owners of the parent company. This can create divided loyalties…

(Source: ICE Collection)

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-4-6227724 Email:[email protected] Website:www.vni-connection.com

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