Vietnamese food major KIDO Group is looking to list its subsidiary arm – KIDO Frozen Foods (KDF) – in the second quarter of 2017 after the completion of its initial public offering.
IPO and listing are two different processes in Vietnam. KIDO Group which currently holds 99.8 percent of the frozen food subsidiary will see a sale of its 20 percent ownership in KDF which is slated for completion by April 19. This will then be followed by a 15 percent divestment to business partners and company’s employees.
The company will not be selecting investors. As under the target of this IPO, KDC aims to give opportunities to more individual and institutional investors, in addition to attracting external funding to KDF.
The shares in the IPO are priced at VND 52,000 apiece, based on an adequate transaction value and the evaluation by financial agencies. This range values KDF at around VND3 trillion (US$132 million).
Viet Dragon Securities is advising the group on the IPO and listing
The brokerage house, in which KIDO Group acquired part of the stake in 2015, values KDF shares higher at VND 64,700 each, projecting the company’s revenue to expand 27 percent to reach nearly VND1.8 trillion in 2017, which will potentially lead to a net profit of VND 202 billion.
KDF will be traded on UPCoM (unlisted public company market), a sub-exchange on the Hanoi listing bourse.
While KIDO declined to name the investors who have submitted bids to buy KDF shares, the group’s deputy chairman and CEO had earlier announced in a KDF roadshow late March that – Unilever had expressed an interest in the IPO.
Unilever is the previous owner of the Wall’s ice cream brand, which was acquired by the KIDO Group in 2003 to establish KDF. Since its acquisition, the ice cream business has been contributing to a higher proportion of the firm’s revenue.
Apart from Unilever, a lot of multinational investment have similarly expressed interest to purchase shares in KDF. This includes a Malaysian investment fund which intends to wholly acquire KDF for US$200 million and a Japanese firm who also proposed to buy 35 percent of KDF for VND 60,000 per share.
After the IPO, KDF plans to add more new products this year by investing in food, such as meats, vegetables, cheese, and potato. Besides, mergers and acquisitions activities will also be implemented faster, targeting domestic and foreign food companies mainly from Indonesia, Malaysia, and Thailand.
By Vivian Foo, VCNewsNetwork