14 May 2013
Divestment of stake in Sheraton Hotel
Ho Chi Minh City – VinaLand Limited (“the Company” or “VNL”), the AIM-quoted investment vehicle established to target strategic segments within Vietnam's emerging real estate market, announces that it has divested its stake in the company that owns the Sheraton Nha Trang Hotel & Spa located in Nha Trang city, Khanh Hoa province at the end of April 2013.
The Sheraton Nha Trang Hotel & Spa is an operating asset with 284 rooms, including 6 food and beverage venues as well as several other amenities and was opened in March 2010 following a protracted construction period. The hotel site which is situated on the central beach strip of Nha Trang was acquired by VNL in 2006 to develop a modern hotel to capitalise on the fast growing tourism business in central Vietnam. However, since the opening of the hotel, growth in the overall tourism industry in Nha Trang has been adversely impacted by limited flight capacity servicing the region and an increase in the supply of hotels. VNL sold the asset at an enterprise value of USD42 million with the purchaser assuming the majority of the existing bank debt of approximately USD38 million. VNL’s 66.7 percent stake in the project resulted in net proceeds to VNL of USD3.1 million which is 17.1 percent above the asset’s carrying value. The divestment reduces debt from the consolidated balance sheet of VNL and also removes VNL’s future funding commitments related to this asset due to operating shortfalls of the hotel. The proceeds will be utilized to cover the continuation of the share buyback programme and operating costs.
Speaking on the transaction, Managing Director, David Blackhall stated, “The closure of this transaction is the second full exit since VNL's EGM on 21 November 2012, where shareholders supported a new three year term which included a new strategy focused on realization of assets. This deal has resulted in a significant reduction in portfolio level debt, consistent with our objective to consolidate the Company’s portfolio by eliminating capital commitments and minimising leverage where possible in order to free up cash available for distribution to shareholders as future projects are divested. Following this transaction, VNL’s portfolio consists of 34 projects.”
VinaCapital is a leading asset management and real estate development firm in Vietnam, with a diversified portfolio of USD1.5 billion in assets under management. VinaCapital was founded in 2003 and boasts a team of investment professionals who bring extensive international finance and investment experience to the firm. Our mission is to produce superior returns for investors by using our experience and knowledge to identify the key trends and opportunities that emerge as Vietnam continues to develop its economy. To achieve this, VinaCapital has teams with broad experience covering equity markets, fixed income, private equity, venture capital, real estate and infrastructure.
VinaCapital manages three closed-end funds trading on the AIM Market of the London Stock Exchange. These funds are: VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL), and Vietnam Infrastructure Limited (VNI). VinaCapital also co-manages the DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson.
VinaCapital has offices in Ho Chi Minh City, Hanoi, Danang, Nha Trang and Singapore. More information about VinaCapital is available at www.vinacapital.com.
VinaCapital Investment Management Limited
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