Bain Capital has struck its first deal in Vietnam by investing at least $200 million in the conglomerate Masan Group, per an announcement.
The US-headquartered investment firm has agreed to subscribe to Masan’s convertible dividend preference shares (CDPS) at 85,000 dong apiece, which will be mandatorily converted into ordinary shares at a 1:1 ratio after 10 years.
Besides the normal dividends payable to the company’s shareholders, the CDPS has no preference dividend for the first five years. From the sixth anniversary onwards, there will be a 10% preference dividend at par value of each outstanding CDPS per annum, reads the announcement.
Proceeds from the investment will be used to strengthen the company’s financial position and de-lever its balance sheet, it added.
Masan said that it was in discussions with other investors to upsize the funding to $500 million, subject to market conditions and the company’s capital needs.
Masan will also explore other strategic alternatives for equity capital, including diluting its interest in non-core businesses to achieve a sustainable net debt-to-EBITDA ratio below 3.5X.
The transaction is expected to be completed by the end of this year.
“We aim to be a profitable multiplier in Vietnam’s golden consumption era. Bain Capital’s partnership is a strong validation of all the consumer-centric investments and transformation we have made over the past 18 months to win 80% of the consumer wallet,” said Masan’s CEO Danny Le.
Barnaby Lyons, a Partner at Bain Capital, termed this as “an important investment” in Vietnam. In Asia, the $180-billion firm has invested in consumer and retail businesses such as Schwan’s Company and Carver Korea.
Masan has raised a war chest of money for its businesses from marquee investors such as TPG, Abu Dhabi Investment Authority (ADIA), GIC, Temasek-backed SeaTown Holdings, Alibaba and SK Group. The company’s operations span from FMCG, retail and animal protein, to natural resources, financial services and technology.
Its omni-channel retail platform The CrownX is Vietnam’s biggest retail business. The CrownX itself was valued at $8.2 billion in its December 2021 funding round. Masan has a market capitalisation of around $4.5 billion.