US-based investment firm Bain Capital is injecting an additional $50 million into Vietnamese conglomerate Masan Group, following a previously announced $200-million investment in October.
Transaction terms remain the same as the last financing, which involves convertible dividend preference shares to be issued for 85,000 dong ($3.5) apiece and converted into ordinary shares at a 1:1 conversion ratio, Masan said in a statement.
There are no hedging structures or stock borrow facility for Masan’s shares as part of the equity investment that would result in the company’s shares being sold in the open market at the date of the issuance.
The new transaction is expected to close in the next few months. Masan said it will continue to explore other strategic alternatives for equity capital including diluting its interest in non-core businesses.
The proceeds from the second tranche of Bain Capital’s investment will strengthen Masan’s financial position and be allocated to de-lever its balance sheet.
Masan said the combined operating profits of its consumer retail businesses, (including Masan Consumer Holdings, WinCommerce, Masan MEATLife, and coffee chain Phuc Long Heritage) grew by 45.5% and 47.3% year-on-year in the first nine months of 2023 and Q3 2023, respectively. Free cash flow improved to 2.2 trillion dong in Q3 2023, compared to 125 billion dong in the same period last year.
Before welcoming Bain Capital to its roster of backers, Masan had raised money for itself and subsidiaries 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, Vietnam’s biggest retail business, was valued at $8.2 billion in its December 2021 funding round.
Bain Capital, in an earlier interaction with DealStreetAsia, said that Vietnam is one of the most exciting markets in Southeast Asia for the firm. Sarit Chopra, a partner at Bain Capital’s Special Situations business, revealed that the firm might look at more opportunities in Vietnam’s big conglomerates.