Guotai Junan International is in talks with Vietnam Investment Securities (IVS) over a controlling stake in the Vietnamese brokerage, IVS announced on its WeChat public account.
The move, which comes after Guotai Junan International's opening up its Singapore office in 2015, signals leading Chinese mainland brokerages' strategic expansion in Belt & Road Initiative countries.
The IVS announcement said its board of directors had passed a resolution to introduce multiple strategic investors through private placement on July 18.
The move, which comes after Guotai Junan International's opening up its Singapore office in 2015, signals leading Chinese mainland brokerages' strategic expansion in Belt & Road Initiative countries
The biggest private placement purchaser was Guotai Junan International. The Hong Kong arm of the Chinese mainland’s third-largest broker by assets received 46 million IVS shares, 51 percent of registered capital after the replenishment.
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Registered capital of IVS is expected to increase from 340 billion dong (US$14.68 million) to 900 billion dong if the prospective acquisition materializes, the announcement said. Other strategic investors include Ho Chi Minh City-based management consulting service provider Dazhong (Vietnam) International and Hanoi-based financial service company Long Viet.
Established in 2007 and listed on the Hanoi Stock Exchange in 2011, IVS is the only one among the top 10 brokerages in Vietnam that has a Chinese mainland shareholder, the company claims.
Under IVS’ current structure, its chairman Hao Dan, a Chinese national, is the single biggest shareholder with 25.36 percent of shares, according to figures compiled by Bloomberg.
In a filing released by Guotai Junan International to the stock exchange earlier this month, the brokerage said the company is in active negotiations over a proposed acquisition of majority interest in a company in Vietnam that is principally engaged in the provision of financial services.
Should the acquisition proceed, it will let Guotai Junan further expand its business presence in Southeast Asia following its establishment in Singapore, allowing the group to seize B&R opportunities, the announcement said.
In an email reply to China Daily’s enquiry, Guotai Junan said the company is still in negotiations with the target firm. It did not name the firm and said the price of the acquisition could not be disclosed.
It also told China Daily that it has no further merger and acquisition plans in B&R countries at this stage. The Singapore office is currently the only overseas arm of the listed brokerage.
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