Vietnam's largest brewer a foreign owned business now

By Anh Minh January 5, 2019 | 12:24 am PT

Men drink Saigon beer, a product of Sabeco, at a restaurant in Hanoi. Photo by Reuters

After a $4.78 million debt restructuring, Vietnam's largest brewer Sabeco is now owned by a Thai company.

In December 2017, Thai Beverage (ThaiBev) acquired a 53.59 percent stake in Sabeco from Vietnam's Ministry of Industry and Trade for $4.78 billion through a local entity, Viet Beverage (VietBev).

VietBev, which had 100-percent Vietnamese ownership at the time with VND682 billion ($29.33 million) in charter capital, was loaned VND111.21 trillion ($4.78 billion) by ThaiBev to complete the transaction.

VietBev was used as a financial vehicle to get around a 49 percent foreign ownership cap in place at the time.

The $4.78 billion loan was then converted to shares under a debt-to-equity conversion agreement between VietBev and ThaiBev. As a result, VietBev now has a chartered capital of VND111.89 trillion ($4.81 billion), increasing ThaiBev's ownership in VietBev to 99.39 percent.

The adjustment in capital was approved by local authorities, and made possible after authorities raised Sabeco's foreign ownership cap to 100 percent at the end of 2018. The conversion was completed a few days ago.

ThaiBev has since announced it is committed to ensuring shareholders' benefits on share prices and annual dividends after this restructure.

With a charter capital of VND111.89 trillion, VietBev is among a few businesses in the country with chartered capital of hundreds of trillions of dongs, along with state-run oil & gas giant PVN (VND285 trillion or about $12.26 billion); Vietnam's sole power distributor and biggest producer EVN (VND163.8 trillion or $7.04 billion); and telecoms provider Viettel (VND121.52 trillion or $5.23 billion).

Recently, Sabeco was caught up in legal trouble with tax authorities, who blocked its bank accounts in order to withdraw VND3.1 trillion ($135.73 million) to collect overdue special sales tax from 2007 to 2015 and penalties for administrative violations. However, this enforcement action proved futile as accounts handed over to the tax authorities were empty.

After the recent share conversion, the Prime Minister has directed the tax agencies to suspend their enforcement, in order to carefully consider regulations as it involves "foreign factors."