Masan Group (stock code: MSN) has successfully completed a $250 million equity fundraising from Bain Capital, a private equity firm with approximately $180 billion in assets under management. Accordingly, Masan received VND 6.228 billion in net cash from this investment. The company will continue to actively seek alternative solutions to reduce leverage and interest expenses with the target of Net Debt to EBITDA of <3.5x.
Over the past 2 years, the company has successfully raised $1.5 billion from the global capital market. In the fourth quarter of 2023, Masan Group successfully hedged 100% of its long-term USD debt exposure with favorable terms: $950 million of principal was converted to VND at an exchange rate of 23,937 with a fixed interest rate of 8.93% per annum.Â
Accordingly, Interest Rate Swaps combined with FX Forward: $45 million of principal payment in 2024 with an exchange rate of 24.005; $300 million with a fixed interest rate of 6.48% per annum for 5 years with a 1-year forward exchange rate of 23.790 to mitigate risks related to currency and interest rates. Therefore, the recent appreciation of the US dollar has no material impact on the company’s profitability.
Besides, on April 20, Techcombank (stock code: TCB) – an associate of the group, approved a plan to distribute a 15% cash dividend. Owning 19.9% of shares, Masan Group is expected to receive more than VND 1,000 billion in cash in the next 6 months, helping to reduce financial leverage.
In 2024, Masan Group plans to generate revenue of VND 84,000 – 90,000 billion, increasing by 7.3% – 15%, respectively. After-tax profit is expected to range from VND 2.250 billion to VND 4.020 billion, up 31% – 115% compared to the results achieved in 2023. The company also expects to not pay dividends in 2024.
Regarding the capital raising plan, Masan plans to issue a maximum of 10% of outstanding shares for a private placement to strategic shareholders at a price not lower than the book value. The expected time is in 2024 or before the 2025 AGM. The shares will be subject to a lock-up period of 1 to 3 years.
The company is considering two options: a private placement of common shares or a placement of dividend-paying preference shares. With the option of selling dividend-paying preference shares, investors will receive 0% for the first 6 years from the date of issuance. From the 7th year onwards, the fixed dividend is 10%/year. In addition to the fixed portion, preference shares will still receive dividends equal to common shares (if any).
