Phu Long Real Estate JSC, which is part of billionaire Phuong Thao’s Sovico Group, received VND2.3 trillion (US$ 101.4 million) of additional capital before acquiring a 50 per cent stake in Splendora urban project and replacing Korean investor Posco E & C.
Phu Long has replaced Posco E & C to become a shareholder holding a 50 per cent stake in An Khanh Joint Venture, the developer of the Splendora urban project. The remaining 50 per cent stake of the joint venture is still held by Vinaconex.
Before the acquisition of shares in this joint-venture, Phu Long made two consecutive capital injections in December 2014, from VND700 billion to VND2,000 billion (US$30.8 million to 88.2 million), then to 3,000 billion (US$132.3 million).
The acquisition of the Splendora project marked the presence of Phu Long in the northern market. This is a 26 ha urban area located along the Lang - Hoa Lac expressway with 6,440 apartments and 1,311 villas and townhouses.
In addition, Phu Long has been developing several projects in Ho Chi Minh City, including Dragon City, Dragon Riverside City, and Dragon Village.
The Splendora project, which was a joint venture between Vinaconex and Posco E & C, has the total investment capital of US$2.57 billion and was commenced in 2009. Although the phase 1 of the project had been completed in 2013, phase 2 was implemented at the end of 2017 due to the unfavorable real estate market.
Previously, due to prolonged losses of this joint-venture, Vinaconex offered to sell its shares in this joint venture but failed to do so. One of the reasons is that Posco E&C has a pre-emptive right to buy these shares before Vinaconex sells to a third party. Neither Vinaconex nor Posco has the right to make decisions in this joint-venture as each holds a 50 per cent stake.
At the shareholders' meeting in 2017, Vinaconex's board of directors said that it is hiring a consultant to negotiate a 50-50 split on the project with Posco E&C or to purchase shares held by Posco to implement the project by itself.
However, with the withdrawal of Posco E&C from the joint venture, Phu Long will have the opportunity to own a 100 per cent stake in the project if Vinaconex also makes divestment. Besides this project, Vinaconex is also investing in projects of Vinata 2B, Lang Ha No.97, Lang Ha No. 93 and Nguyen Huy Tuong No.25.
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