VietNamNet Bridge – The German bank says that it bought 2.7 million shares to maintain its ownership ratio in Hoang Anh Gia Lai (HAGL) Group after HAGL listed more shares. This move is contrary to the previous speculation on Deutsche Bank’s divestment.

Hoang Anh Gia Lai's rubber farm.

In the announcement sent to the HCM City Stock Exchange on December 6, Ms. Fiona Cheng - Vice Chair of the Deutsche Bank AG - Hong Kong Branch, said that the bank and related entities still own 4.99 percent of shares of the HAGL Group. Compared to the most recent report dated June 26, 2013, the rate of ownership is not changed.

During the period from 25/6 to 29/11, Deutsche Bank AG bought 6.9 million HAG shares, raising its ownership ratio from 3.03 percent to 3.82 percent.

The Deutsche Asset Management (Asia) Ltd. sold 3.94 million shares, reducing its stake to 0.03 percent and the Deutsche Bank Trust Company Americas sold more than 264,000 shares, to have the ownership rate at 1.14 percent.

During this time, the Deutsche Bank AG-related group bought 2.7 million shares, retaining the ownership rate in HAGL at 4.99 percent because HAGL has just listed additional 73.3 million shares.

The announcement by the Deutsche Bank was launched a few days after the latest report of a non-governmental organization, which recommended investors to withdraw capital from HAGL. This organization in May accused HAGL of land occupation, deforestation in Laos and Cambodia.

In November, this organization stated that HAGL did not keep the commitment to address environmental violations at its projects in Laos and Cambodia. It also said that this could make impacts on HAGL’s foreign investors - Deutsche Bank and IFC – and recommended these investors to withdraw their capital from HAGL.

Most recently, on December 3, this organization wrote on its website that the Deutsche Bank had withdrawn capital from HAGL after its recommendation.

HAGL started planting rubber in 2007. By the end of 2012, the group grew 43,540 hectares and it aimed to have 51,000 hectares of rubber in the Central Highlands of Vietnam, Laos and Cambodia by the end of 2013 (Laos and Cambodia account for 80 percent).

HAGL’s first latex processing plant with an annual capacity of 25,000 tons in Laos has been put into operation. According to its financial statements, in the January-September period, HAGL earned VND122 billion ($6 million) of revenue from latex, or 6 percent of its total revenue.

Apart from earnings from latex, according to the company's calculations, at the end of the exploitation period (after 25 years), 51,000 hectares of rubber will produce about 3 million cubic meters of wood to serve in the wood processing industry, worth about $750 million.

Na Son