Information from Bao Viet Group (BVH) showed that Sumitomo Life Insurance Company (Sumitomo Life) has officially raised its ownership in Vietnam’s leading financial and insurance group Bao Viet from 17.48 percent to 22.09 percent of charter capital. The transaction was completed by both parties on December 18th 2019 in Hanoi.
Accordingly, Sumitomo Life invested 4.012 trillion dong (equivalent to 173 million US dollars) to buy more than 41.4 million BVH shares, equivalent to a price of 96,817 dong per share. This price is nearly 30 percent higher than BVH’s closing price on December 18th (74,000 dong per share).
Previously, at the 2019 annual shareholders meeting, Bao Viet Group has submitted and received proposal of shareholders on the charter capital raising plan, with starting price being the highest among two price levels: the average reference price of 30 consecutive trading days and the tripled book value in the review report in 2019. This selling price is much higher than these two prices.
The issued shares will be restricted to transfer within one year from the date of the offering completion. Bao Viet Group’s charter capital after the issuance will increase to 7.423 trillion dong. BaoViet Group will become an associate of Sumitomo Life.
The more than four trillion dong mobilised will be used to supplement equity, enhance financial capability to serve the business strategies in the near future, said Bao Viet’s representative. In 2012, Sumitomo Life spent 7.098 trillion dong (equivalent to 340 million US dollars). The total amount of capital that Sumitomo invested in Bao Viet reached 513 million US dollars, equivalent to about 10.1 trillion dong. In addition to raising ownership rate, Sumitomo Life will send more experts to Bao Viet to support the group’s expansion such as providing business skills in life insurance activities, expanding business network.
According to Masahiro Hashimoto general director of Sumitomo Life, Bao Viet Group and Sumitomo Life have cooperated and created valuable and indispensable partnership for both companies. Sumitomo Life’s CEO affirms his wish and great efforts to provide knowledge and experience in insurance field to Bao Viet in a flexible manner which is suitable to the needs of Bao Viet and the people of Vietnam.
Experts said that the relaxation of regulations on foreign ownership in financial and insurance field is attracting Japanese investors. Vietnam is currently the most attractive market among emerging markets.
Bao Viet Group said that many potential international investors participated in the private placement process, in which Sumitomo Life was selected to join the negotiation round after evaluation and rating process.
General director of Bao Viet Group Do Truong Minh stressed that the further increase in ownership rate has showed the trust of Sumitomo Life in cooperation with Bao Viet Group. According to Minh, the deal marks another step in the implementation of Bao Viet’s strategies, in order to focus capital and resources to promote growth in core businesses. In the next phase, by enhancing competitiveness and quality of financial services and smart financial and insurance products, Bao Viet Group will better satisfy the increasingly diverse needs of the economy and society.
