VietNamNet Bridge – Thai group Berli Jucker’s (BJC) efforts to acquire Metro Vietnam supermarket chain faced opposition from the minority shareholder groups because they fear the financial and legal risks.

In zn extraordinary shareholders’ meeting of BJC on January 8, nearly 88.5% of the minority shareholders did not vote for the acquisition of Metro Vietnam. TCC Holding - the largest shareholder - is considered to be shareholder with related interests as it directly proposed the transaction and participated in negotiations but was not allowed to cast the vote.

In August last year, BJC agreed to buy Metro Cash & Carry Vietnam from the German group of Metro. They then approved the additional payment terms in October.

Accordingly, BJC will have to give the letter of guarantee worth 655 million euros to the seller in two working days after filing papers with the Government of Vietnam to amend the investment certificate. If the government requires proof of payment before the amendment, BJC will have to transfer 655 million euros into the account of Metro Vietnam.

In the Bangkok Post, Mr. Weerawong Chittmittrapap - a BJC official - said the company may have to pay 1.31 billion euros to complete the acquisition. "If the shareholders vote in favor of the deal under the additional terms, BJC will face many financial risks." The company may have to borrow up to 40.52 billion baht and the ratio of debt to equity will increase to 1.99.

JayDee Partners - an independent financial adviser for BJC - also said the deal under the additional conditions is unsuitable, because it will create financial and legal risks for BJC. If BJC does not have the financial resources necessary to participate in the deal, they will face legal trouble due to insufficient ability to perform its obligations under the contract.

However, despite the opposition of the group of minority shareholders, Weerawong said that TCC Holding would continue negotiations with the Metro Group on how to implement the deal in an appropriate way for both parties.

"If both sides can solve all obstacles and continue with the fairer terms, TCC Holding is likely to bring this issue to the next meeting of the BJC shareholders," he said.

If the minority group of BJC shareholders, except for TCC Holding, vote to approve the deal, BJC can continue. But if they reject again, TCC Holding will take over and seek funding to buy Metro Vietnam itself.

S. Tung