26.06.2020, 23:47

Foreign funds cut VTC Online losses, losing 83% in value after 8 years of investment

According to a report of Vietnam Phoenix Fund Limited (formerly DWS Vietnam Fund), in April, the fund successfully divested its investment in VTC Online and collected 1.7 million USD, about 14.5% higher than Actual value as at 30/3.

Foreign funds cut VTC Online losses, losing 83% in value after 8 years of investment

Earlier in 2012, Vietnam Phoenix Fund poured US $ 10 million to own a 20% stake in VTC Online, equivalent to a company valuation of US $ 50 million. However, with the “stop-loss” price of only US $ 1.7 million, Vietnam Phoenix Fund has lost about 83% of its initial investment value.

In 2017, Multimedia Communications Corporation (VTC) planned to auction all 1.02 million VTC Online shares, equivalent to 44.75% of outstanding shares at the price of VND 245 billion ( 10.8 million USD), much lower than the valuation of Vietnam Phoenix Fund but still unsuccessful.

VTC Online was established in 2008 and was one of the three largest online game publishers in Vietnam. VTC Online’s financial potential has increased significantly when it received the investment capital of IDG Ventures Vietnam in 2010 and Vietnam Phoenix Fund in 2012. However, VTC Online’s business operations began to decline. 2014 with a net loss of VND 102 billion this year. The cause of the big losses in 2014 mainly revolved around the losses of the gaming business.

In the following years, VTC Online’s business continued to face difficulties. Profits in 2015 and 2016 reached VND 8 billion and VND 10 billion respectively, a modest figure compared to the profit of tens of billion per year in the period before 2014.

Besides the popularity in the gaming community, VTC Online’s name is also associated with former chairman Phan Sao Nam, who was sentenced to five years in prison for organizing gambling, money laundering.

Besides divesting from VTC Online, Vietnam Phoenix Fund is also planning to divest from investments in Anova Corp and SSG Group. According to the fund’s announcement, the current divestment from Anova Corp, SSG Group is making progress with the acquisition of partners and is expected to be completed in the next few months.

Regarding the portfolio of listed stocks, Vietnam Phoenix Fund is currently disbursing about US $ 30 million into Vietnam’s stock market (as of May 31). In particular, the 10 largest investments of the fund include names such as VNM, FPT, HPG, VHM, VCB, MWG, KBC, KDH, REE, POW.

In May, Vietnam Phoenix Fund made additional disbursements to Binh Minh Plastics (BMP). The fund says BMP is expected to benefit from the growing demand for civil construction in Vietnam. In addition, lower raw material prices, along with increased automation in production help strengthen the company’s medium-term profitability.

Source: ndh.vn