VinaLand Limited updated its investing policy in November 2009 in accordance with AIM Rule 8, and then on 21 November 2012, VNL held an EGM whereby shareholders supported both recommendations put forth by the Board regarding the continuation of the Company. As a result the Special Resolution, which called for the continuation of the Company as presently constituted, was not passed and the Ordinary Resolution to restructure the Company was passed with a two-thirds approval rate. The Ordinary Resolution establishes the framework to restructure the Company including changes to the Company’s investment strategy, distribution policy, investment manager’s remuneration and improvements in corporate governance

INVESTMENT OBJECTIVES

VinaLand Limited (“VNL” or “the Company”) is a closed-end investment company incorporated in the Cayman Islands.  The Company is currently in a cash return period. 

During the Cash Return Period, the Company will not make any new investments, unless additional funds are required for existing projects within the Company's property portfolio, with the intention of maximising that particular asset's value and which will assist in its eventual realisation for the highest possible value.

The Company will seek to realise its existing property portfolio at the best possible value and in a reasonable timeframe. The Company will only continue with the development of selected mixed use (which may include retail/commercial use) and residential projects, within its existing portfolio of property assets. This will enable full or partial realisations of those projects and also generate revenue from the sale of the residential property, currently in its property portfolio. The Company will also undertake preliminary infrastructure works on the larger projects in its property portfolio, in particular to expedite the completion of works to comply with statutory requirements. This will enable the Company to realise these assets more quickly and will also increase their realisation value. The completion of work to satisfy regulatory requirements also means that the land on these projects may be split into smaller parcels of land. This creates an opportunity for secondary value and should also increase the realisation value of the asset.

The Company will continue to pursue, where necessary, any licences and/or approvals which are required for a particular asset to continue its development. Once these licences or approvals, as appropriate, have been secured, it will make the asset more attractive to potential purchasers, which will enable a quicker realisation at a higher value.

INVESTMENT MANAGER

VNL is managed by VinaCapital Investment Management Ltd (“VCIM” or the “Investment Manager”), a Cayman Islands company. VCIM was established in 2008 and manages three listed and several unlisted investment companies. More information about the VCIM management team is available here. In addition, VCIM employs a Development Advisor, VinaCapital Real Estate Ltd (VCRE), to manage and develop property assets, More information about the VCRE management team is  available here.

INVESTING POLICY

The Company will adhere to the following investment policies and restrictions:

Type of investment:
The Company is permitted to engage in all forms of property investment and property development as allowed under the laws of each jurisdiction in which it operates, utilising instruments and structures that may be suitable to allow participation in selected investment opportunities. These investments will be made directly or through investee companies (which are special purpose vehicles established specifically for each project) or by way of joint venture partnerships with other reputable developers.  During the Cash Return Period, the Company will not make any new investments, unless additional funds are required for existing projects within the Company's property portfolio.


Geographical focus: 
At least 70 percent of the Gross Asset Value of the Company will be invested in Vietnam. Up to a maximum of 30 percent of the Gross Asset Value may also be invested in neighbouring Asian countries (namely China, Cambodia and Laos), should the Directors consider that such investments would offer potentially attractive returns.. During the Cash Return Period, the Company will not make any new investments, unless additional funds are required for existing projects within the Company's property portfolio.


Sector focus:
The Company during the initial term targeted five property sectors: office, retail, residential, industrial and hospitality/leisure. The Company’s primary focus was on Ho Chi Minh City, with a secondary focus on Hanoi and key leisure areas, including but not limited to Nha Trang, Hoi An and Danang. During the Cash Return Period, the Company will not make any new investments, unless additional funds are required for existing projects within the Company's property portfolio.


Control of investments:
The Company will seek to own a controlling interest in its investments, either by owning a direct controlling participating interest in the project or by controlling the investee companies through which the investments are made. In the event that the Company holds a minority interest in a project, it will seek to secure adequate minority protection rights.

Realisation of investments:
The Company is a publicly listed investment company on the London Stock Exchange’s AIM. Investors are free to purchase and sell shares whenever they please. The Company will aim to realise individual investments when the Board, with the advice of the Investment Manager, the Investment Committee and the Development Adviser, believes the realisation would be in the best interests of the Company and fulfil its investment objectives. The Company intends to affect exits through disposals of its projects or interests in investee companies to institutional and private investors.

The Company will seek to realise its existing property portfolio at the best possible value and in a reasonable timeframe. The Company will only continue with the development of selected mixed use (which may include retail/commercial use) and residential projects, within its existing portfolio of property assets. This will enable full or partial realisations of those projects and also generate revenue from the sale of the residential property, currently in its property portfolio. The Company will also undertake preliminary infrastructure works on the larger projects in its property portfolio, in particular to expedite the completion of works to comply with statutory requirements. This will enable the Company to realise these assets more quickly and will also increase their realisation value. The completion of work to satisfy regulatory requirements also means that the land on these projects may be split into smaller parcels of land. This creates an opportunity for secondary value and should also increase the realisation value of the asset.

During the Cash Return Period the net proceeds of all portfolio realisations will be returned to Shareholders, at the Board's discretion, having regard to requirements to invest further funds in existing projects within the Company's property portfolio to enhance or preserve exit values; the Company's working capital requirements (including the fees payable under the Amended and Restated Investment Management Agreement) and the cost and tax efficiency of individual transactions and/or distributions.

Investment size:
No single investment may, at the time of investment, exceed 20 percent of the Gross Asset Value.

Cross holdings:
If the Investment Manager and the Directors deem it appropriate, the Company may also invest up to 20 percent of its Gross Asset Value in other property funds which themselves invest in property in the target region. All investments must be approved by the Investment Committee and, where a project or investment exceeds ten percent of the Net Asset Value, in addition, the approval of a majority of the Board must also be obtained.

Leverage:
There is no limit in the Company’s articles of association to the amount of borrowings that it may incur. As is typical with real estate development and investment, investee companies may use leverage for individual projects. All leverage will be non-recourse to the Company and will be incurred by the investee companies. The level of the debt incurred will vary depending on the laws and regulations pertaining to the debt market with regard to the particular type of project and the ability of the relevant Investee Company to service the debt.

Other information:

  • The Directors will review the investment policies on an annual basis.
  • Changes to the investment policies may be prompted, inter alia, by changes in government policies or economic conditions which alter or introduce additional investment opportunities. In the event of a breach of any investment restrictions, the Investment Manager shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification shall be made to a Regulatory Information Service Provider.
  • Cash pending investment, reinvestment or distribution will be placed in bank deposits, bonds, government-issued treasury securities or in local money market funds for the purpose of protecting the capital value of the Company’s cash assets.
  • In order to hedge against interest rate risks or currency risk, the Company may, where appropriate, also enter into forward interest rate agreements, forward currency agreements, interest rates and bond futures contracts and interest rate swaps and purchase and write (sell) put or call options on interest rates and put or call options on futures on interest rates.

Co-investments

The Investment Manager may from time to time manage other funds which have a similar or different investment objective and policy to that of the Company. Nevertheless, circumstances may arise where investment opportunities will be available to the Company and which are also suitable for one or more of the other funds managed by the Investment Manager. Where a conflict arises in respect of an investment opportunity, the Investment Manager will allocate the opportunity on a fair basis. In such event, the allocations will normally be made on a pro rata basis between the Company and the other funds based on the amounts available for investment in each fund at the time the investment opportunity arises. However, the Investment Manager will be entitled to recommend to the Board the allocation of investment opportunities on a basis otherwise than as set out above if it deems it appropriate. In those circumstances the Board will determine what level of investment the Investment Manager may make on behalf of the Company.

The Investment Manager may also from time to time manage one or more funds incorporated, licensed or registered in Vietnam. If appropriate, therefore, the Company may be able to invest in local companies or projects up to the foreign ownership restriction then existing with the local fund making additional investments in order to gain control of that company or project. This facility would allow the Company to benefit from majority participation in local projects thereby reducing the risks which may be associated with the use of locally established co-investors/partners and thereby also allowing effective overall control to be exercised by the Investment Manager alone.

Valuation policy

When valuing projects, the Manager consults two independent Valuers to perform a Full Valuation for each property on an annual basis, this valuation is then followed up by an updated valuation six months later (the “Updated Valuation”). Revaluations may be obtained more frequently for individual properties if there has been an event that the Valuation Committee or investment manager believes may have resulted in a material change in the value of a property.

Each Valuer prepares a report containing the recommended Fair Value of the property, along with the assumptions used to determine that value. If there is a material difference between the two valuations, the investment manager reviews the key assumptions to determine the primary cause(s) of the difference and discusses the assumptions with the Valuers to confirm each Valuer’s respective position. The Updated Valuation is performed by the Valuer whose valuation was adopted during the Full Valuation. Exceptions to engaging two independent valuers are made in the following circumstances:

  • For any project whose value is equal to or is below USD5 million: only one valuation is obtained at the Full Valuation. The same Valuer provides an update at the Updated Valuation.
  • For projects being divested with (i) Sales and Purchase Agreement (“SPA”) signed, (ii) deposit received and (iii) conditions precedents readily achievable: only one valuation is obtained from a Valuer to update the valuation if required until the divestment is closed (this may be required under a protracted closing).

The investment manager summarizes the key assumptions and valuation results for the Valuation Committee. The Valuation Committee receives the analysis and copies of the independent Valuers’ appraisal reports for review. A formal meeting is held to discuss the valuation process and results. After acceptance of the valuation report, the Valuation Committee will recommend the valuation to the Board for approval. In addition to the annual valuation cycle, at the end of each quarter the investment manager reviews all real estate investments for possible impairment based on internal calculations. If there is an indication that a property’s value has materially increased then the property will be included in the list of properties being independently valued. If there is an indication that a property’s value has decreased then an assessment will be made by the investment manager to quantify the amount of any decrease. If there is evidence of a material impairment an independent valuation will be obtained to assess the need for any adjustment in the value of the property. For projects that are being divested (SPAs signed and deposits received), a desktop valuation update will be done by the asset management team to assess whether a valuation adjustment is warranted. Based upon the analysis performed by the investment manager and/or the independent Valuers, the Valuation Committee makes recommendations for a valuation adjustment to the Board for approval.

The Net Asset Value and the Net Asset Value per share shall be calculated (and rounded to two decimal places), in US dollars by the administrator (or such other person as the Directors may appoint for such purpose from time to time) on a quarterly basis.

The Net Asset Value shall be the value of all assets of the Company less the liabilities of the Company determined in accordance with the valuation guidelines adopted by the Directors from time to time.

Under current valuation guidelines adopted by the Directors, such values shall be determined as follows:

  • The value of any cash in hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received shall be deemed to be the full amount thereof, unless in any case the Directors shall have determined that the same is unlikely to be paid or received in full, in which case the value thereof shall be arrived at after making such discount as the Directors may consider appropriate in such case to reflect the true value thereof;
  • The value of securities which are quoted or dealt in on any stock exchange (including any securities traded on an "over the counter market") shall be based on the last traded prices on such stock exchange, or if there is more than one stock exchange on which the securities are traded or admitted for trading, that which is normally the principal stock exchange for such security, provided that any such securities which are not freely transferable, or which are not regularly traded, or which for any other reason are subject to limited marketability, shall be valued at a discount (the amount of such discount being determined by the Directors in their absolute discretion or in a manner so approved by the Directors);
  • As regards unquoted securities;

     

    • Unquoted investments will initially be valued at fair value, with any expenses relating to their acquisition expensed in the income statement;
    • A revaluation of unquoted investments to a value in excess of or below cost may be made in the circumstances provided by and in accordance with the guidelines issued by the British Investment Fund Association or any successor body;
  • All other assets and liabilities shall be valued at their respective fair values as determined in good faith by the Directors and in accordance with generally accepted valuation principles and procedures;
  • Any value other than in US dollars shall be translated at any officially set exchange rate or appropriate spot market rate as the Directors deem appropriate in the circumstances having regard, inter alia, to any premium or discount which may be relevant and to costs of exchange.

If the Directors consider that any of the above bases of valuation are inappropriate in any particular case or generally, they may adopt such other valuation or valuation procedure as they consider is reasonable in the circumstances provided that such other valuation or valuation procedure has been approved by the Company's auditors. The Directors may delegate to the Investment Manager any of their discretions under the valuation guidelines.

Ordinary Shares

It is intended that the Company's income will consist wholly or mainly of investment income. The Directors currently intend to reinvest a large part of income to take advantage of opportunities meeting the Company’s investment and return objectives, and where suitable opportunities are not available to distribute substantially all of the Company's income and capital gains after administrative expenses and tax to holders of the Ordinary Shares, and aim to increase dividends over the life of the Company.

Life of the Company

The Company does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. The current term is for a period of approximately three years and commenced on 22 November 2016.