Vingroup’s hospitality arm seeks US$300 million in private debt

[SINGAPORE] The hospitality unit of Vingroup is seeking a private credit loan of as much as US$300 million for refinancing, sources familiar with the matter said, the latest in a series of borrowings raised by the Vietnamese conglomerate.

The proposed four-year debt for Vinpearl is structured as convertible preferred shares that offer dividends, with the potential for upside in returns when certain milestones are achieved, the sources said, asking not to be identified discussing private matters. Discussions are ongoing and terms could change, the sources added.

Vinpearl has “attracted interests from international institutions” that are bullish on the industry and the firm’s ecosystem, a representative for the company said. The Vietnamese entity has also been exploring opportunities tied to future investments, they added.

Vinpearl’s fundraising comes as private credit markets in the US reel from a series of high-profile setbacks, with lenders marking down investments and funds capping redemptions. Asia, however, remains more insulated from such concerns given its limited exposure to the software sector, more conservative lending practices and reliance on closed-ended vehicles.  

Vingroup, which has businesses ranging from real estate to private education, has tapped the private credit market previously. In September, the conglomerate’s EV unit VinFast Auto secured a US$150 million loan for working capital, after raising US$510 million in private debt two months prior.

Some of Vingroup’s loans deals are backed by so-called standby letters of credit, a promise by lenders to repay debt if the client borrower cannot. These form of guarantees, provided by Vietnamese banks, can carry hidden risks.

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Vinpearl, which was listed on the Ho Chi Minh Stock Exchange last year, owns 35 hotels and resorts across Vietnam, according to a recent company presentation. It also operates amusement parks, entertainment complexes and golf courses. BLOOMBERG