ThaiBev’s decision to restructure its entire loan amount and interest worth VND111.2 trillion (US$4.9 billion) in Saigon Beer Alcohol Beverage (Sabeco), the largest brewer in Vietnam, has resulted in a reduction of US$5 billion in Vietnam’s foreign debt. 

Following the process, Vietnam Beverage and BeerCo, an indirect wholly-owned subsidiary of ThaiBev, signed an agreement to convert the whole amount in subject into the former’s charter capital. 

This would result in an increase of Vietnam Beverage’s charter capital from VND682 billion (US$29.31 million) to VND111.89 trillion (US$4.81 billion), while Beerco now owns a 99.36% stake in Vietnam Beverage and effectively ends the latter’s legal status as a Vietnamese company. 

The loan conversion, which would provide ThaiBev with a more transparent control of Sabeco, said analyst Lucas Teng from Singapore’s investment bank UOB Kay Hian as quoted by The Edge Singapore, came after Sabeco’s board of directors announced the removal of foreign ownership restriction on December 18, 2018, 

In December 2017, Vietnam Beverage, ThaiBev’s wholly-own Vietnam unit, secured short-term loan worth US$5 billion – 25% of Vietnam’s short-term foreign debt of US$21.9 billion, for the purchase of a 53.6% stake in Sabeco. However, the Vietnamese government is not obliged to pay such debt.

The loan comprised US$3.05 billion borrowed by ThaiBev from local banks, including Bangkok Bank, Kasikornbank Public, Krung Thai Bank, Bank of Ayudhya, and Siam Commercial Bank, with two-year terms. 

BeerCo also borrowed US$1.95 billion from Mizuho Bank and Standard Chartered Bank’s Singapore branch to help finance the deal. 

At present, foreign investors are holding 9.76% stake in Sabeco. The new status of Vietnam Beverage means total ownership rate of foreign investors in Sabeco would increase to over 63%. 

Hanoitimes