According to the HCM City Stock Exchange (HOSE), the board of directors of Vingroup (VIC) has decided to split the Sai Dong Investment and Urban Development JSC (SDI).

Dollar billionaire Pham Nhat Vuong

Under the decision, SDI will use a part of shares of existing shareholders, assets, rights and responsibilities to set up a subsidiary, named Sado Trading JSC, with charter capital of VND500 billion.

After the split, SDI’s charter capital will decrease from VND1.2 trillion to VND700 billion. Vingroup will hold 98 percent of shares of both companies.

Sai Dong is now the biggest shareholder, holding 33 percent of shares of Vincom Retail (VRE), which manages the retail premises network of billionaire Pham Nhat Vuong. Vincom Retail has capitalization value of over VND60 trillion, or $2.6 billion.

It is highly possible that Vuong set up Sado to split the investment in Vincom Retail from Sai Dong, which is a similar move to what he did in the past. The retail sector will be continuously split from the real estate sector.

Vuong has made a number of moves recently to restructure his huge business system to shift his development strategy to technology, industry and services.

This is the second restructuring related to SDI made within one year.

Prior to that, in Q4 2019, SDI swapped shares with Vingroup. Vingroup issued 13.86 million more VIC shares to swap 12.6 million SDI shares belonging to small shareholders. The decision brought profit of VND80 billion to the shareholders.

Before the issuance, Vingroup sold 5.4 million SDI shares on August 26, 2019 to reduce its ownership ratio from 94 percent to 89.5 percent. And the Sai Dong Investment and Urban Development JSC shifted from a joint stock company to a single-member company limited.

SDI was established in 2009. It is the developer of Vinhomes Riverside project in Long Bien district in Hanoi, one of the most modern urban areas in Vietnam.

The moves to restructure Vingroup were done continuously recently after Vuong made public the new strategy in August 2018 which said Vingroup targets becoming a technology – industry – service group of international stature by 2028. By that time, technology will be the focus of the group.

In late 2019, Vingroup transferred VinCommerce to Masan.

In mid-2019, Vinpearl began shifting from selling real estate to hotel and entertainment services.

Vingroup and its subsidiaries have been expanding their business scale and business fields rapidly with capital from bond issuance and from Vinhomes, called Vingroup’s ‘banknote printer’, which specializes in developing real estate projects.

In 2018 alone, Vingroup and subsidiaries mobilized $4.2 billion worth of capital from international institutions. 

V. Ha

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