Developer to sell convertible bonds

HCM CITY — The HCM City Stock Exchange-listed Hoang Anh Gia Lai Group plans to issue one-year convertible bonds worth VND1.1 trillion (US$58 million) this year, with the entire issue to be bought by the Singaporean sovereign fund Temasek.

The coupon rate and conversion ratio are not known yet.

HAGL chairman Doan Nguyen Duc told reporters last Friday that the process was already underway with a memorandum being signed the previous week.

"We expect the deal to be completed by August 20," he said, adding his choice of Temasek from three foreign suitors was based on its financial strength among other factors.

The money raised through the issue would be used for expansion.

HAGL is close to restructuring into a parent and five subsidiary companies that will specialise in rubber, mining, real estate, hydropower, and wood and stone mining.

The group also owns a football team and runs a youth training academy in Gia Lai Province.

"This development targets improved transparency and competitiveness," Duc explained.

"Our first priority is a 51,000ha rubber plantation in the Central Highlands, Laos and Cambodia," he said about development plans for the 2010-12 period.

Others include mining 2.9 million tonnes of iron ore by 2012 end (out of around 60 million tonnes of reserves), building 2,000 apartments every year, and building hydropower plants with a combined capacity of 420MW.

After the restructure, HAGL will make initial public offerings for the five companies.

The real estate affiliate will go first with listing expected in the second quarter of next year. — VNS