Hong Kong-based conglomerate Jardine Matheson’s investment arm Jardine Cycle & Carriage (JC&C) has spent US$350 million buying convertible bonds issued by Vietnamese automaker Thaco.
Prior to the new investment, the Singapore-listed JC&C held a 26.6% stake in Thaco, whose business areas also include support industries, agriculture, construction and real estate, logistics and retail. This holding was reported in February 2019 when the value of Vietnamese billionaire Tran Ba Duong-founded Thaco was valued at US$9.4 billion, and his family held a 70% stake at that time.
Thaco, one of Vietnam’s largest privately-held conglomerates, announced via a regulatory filing to the Hanoi Stock Exchange on November 15 that it has finished the private placement of 8.68 trillion Vietnamese dong.
In parallel, JC&C publicized that it subscribed to buy all these 8,680 five-year Thaco bonds, each worth 1 billion dong for US$350 million – equal to 8.68 trillion dong at the time. The bonds, with a coupon rate of 6% per annum, will be due in November 2028.
In Singapore, JC&C holds the dealership rights for multiple brands, including Mercedes-Benz, Mitsubishi Motors and Kia.
In Vietnam, Thaco makes BMW, Kia, Mazda, Peugeot, Iveco cars and vans. Its manufacturing hub is located in Chu Lai in the central province of Quang Nam.
In January 2018, German carmaker BMW Group announced Thaco as its new sole distributor in Vietnam for three brands of bikes – BMW, MINI and BMW Motorrad – manufactured by BMW. The partnership was a result of JC&C’s recommendation. Thaco is now making some BMW cars in Chu Lai, while MINI and Motorrad products are imported.
Tycoon Tran Ba Duong founded Thaco in 1997 in Dong Nai province bordering Ho Chi Minh City, Vietnam’s largest economic hub. Truong Hai Auto Corporation, the group’s original name, started as a used vehicles trader and repairer. It has gradually expanded to the above-mentioned six businesses areas. JC&C became a strategic investor in Thaco in 2008.