REG - VinaCapital Vietnam - Valuation Adjustments For Some Investments

VinaCapital Vietnam Opportunity FundAnnouncement

09/10/2023 07:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231009:nRSI3910Pa&default-theme=true

RNS Number : 3910P  VinaCapital Vietnam Opportunity Fd.  09 October 2023

VinaCapital Vietnam Opportunity Fund Limited

 

(the "Company" or "VOF")

LEI Number: 2138007UD8FBBVAX9469

Revaluations of Private Equity and Public Equity with Private Terms
investments as at 30 June 2023

 

As part of the audit of the Company's accounts as at 30 June each year, the
audit committee of the Company considers the valuations of the unquoted
investments held in the Company's portfolio. These valuations are carried out
in some cases by KPMG Tax and Advisory Limited, the independent valuer, and in
other cases by VinaCapital Investment Management Limited (the "Investment
Manager"). This year, the valuations have received particular scrutiny
following defaults or potential for default by a number of the investments
described as Public Equities with Private Terms ("PEPT"). They have now been
reviewed by PricewaterhouseCoopers CI LLP ("PwC"), the auditor of the Company,
and approved by the audit committee of the Company.

The result of this significant work is that the valuations of these unquoted
investments have been increased by a total of USD54.3 million as at 30 June
2023.

Public Equity with Private Terms

Part of the increase is in investments described as PEPT, where the Company
has invested in instruments issued by public companies. When these investments
were originally made, the Investment Manager had negotiated "downside
protection" in the form of put options onto the sponsor supplemented by
collateral security over shares held by the sponsor. With the turmoil in the
real estate market at the end of 2022, however, it was not clear that these
protections would be of any effect, or if the obligations would be fulfilled
within the agreed timeframe if the counterparty defaulted. Consequently, in
November 2022, following one such default, the Board asked the Investment
Manager to review the carrying values of these investments. At that point, the
valuations were reduced by USD26.2 million. At the time the Board prepared the
31 December 2022 interim accounts in March 2023, with the prospect of further
events of default, the valuations of these investments were reviewed again and
a further reduction of USD23.6 million was made.

At the time of each of these revaluations there was no evidence that the
downside protections would be effective and no certainty that the Company
would recover all or part of these investments. Over the past six months,
however, the Investment Manager has made good progress in renegotiating terms,
establishing a plan for receiving the full recovery of each investment and
expected returns, and improving the security of the investments as some
stability has returned to the real estate market. The Company has enforced
some of the security it held and sold the underlying shares in the market as
the sponsor's share price recovered. The renegotiated terms of these
transactions have been reviewed as at 30 June 2023 and the revised valuations
have been subject to scrutiny by the Company's auditors.

As a result, the aggregate fair values of PEPT investments in Project Norfolk
(Novaland), Nova Consumer Group (NCG), Dat Xanh Services (DXS) and Hung Thinh
Land (HTL) have been increased by USD26.8million as at 30 June 2023. It should
be noted that the valuations are still lower than their original cost and
expected returns and the Investment Manager will continue to work with each of
the investments in seeking a full recovery over time.

Private Equity

At the financial year end, the valuations of the traditional private equity
investments are also reviewed. Most of the valuations are carried out by KPMG,
the independent valuer and, at the year end, the valuations are also reviewed
by the Company's auditors. The private equity investments include Thu Cuc
International Hospital, Tam Tri Medical, In Holdings, Chicilon Media and Hung
Vuong Plaza. In total, an uplift of USD27.5million in the value of all the
private equity investments as at 30 June 2023 has been approved by the audit
committee of the Company.

The total uplift of USD54.3 million will be included in the weekly net asset
value of the Company on 6 October 2023 which will be released to the market on
9 October.

 

Further information is available on the Company's website at:
https://vof.vinacapital.com/ (https://vof.vinacapital.com/)

 

Enquiries:

 

 Joel Weiden
 Investment Manager - Investor Relations and Communications

 VinaCapital Investment Management Limited
 T: +84 28 3821 9930
 E: joel.weiden@vinacapital.com (mailto:joel.weiden@vinacapital.com)

 Magdala Mullegadoo
 Company Secretary / Administrator

 Aztec Financial Services (Guernsey) Limited
 T: +44 1481 748 814
 E: vinacapital@aztecgroup.co.uk (mailto:vinacapital@aztecgroup.co.uk)

 

1.     References to VOF or the Company in this announcement shall mean
VinaCapital Vietnam Opportunity Fund Limited, a non-cellular company
incorporated in the Bailiwick of Guernsey under The Companies (Guernsey) Law,
2008, with registered number 61765. It is authorised by the Guernsey Financial
Services Commission (reference number 2268242) as a registered closed-ended
investment scheme under The Protection of Investors (Bailiwick of Guernsey)
Law, 2020 and in compliance with the Registered Collective Investment Scheme
Rules, as amended.

 

2.     The registered office address of the Company is East Wing,
Trafalgar Court, Les Banques, St Peter Port, Guernsey, Channel Islands, GY1
3PP.

 

3.     This announcement contains information that is inside information
for the purposes of the UK version of the Market Abuse Regulation (EU) No.
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018 (as amended and supplemented from time to time).

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  PFUUKONRORURRRA