Hoa Binh Corp. & PVFC- HCM: The true value of strategic partnership

 


After having signed agreement of strategic partnership with the 2 foreign partners Chip Eng Seng (Singapore) and Citadel (US), on August 12, 2007 Hoa Binh Corp went on signing another agreement of strategic partnership with PetroVietnam Finance company – HCMC branch (PVFC- HCM), a strong financial institution of the national PetroVietnam Finance Group. The total amount of HBC shares sold to the 3 partners in these agreements are 2.2 million; PVFC alone bought 1.2 million shares (12% of HBC’s chartered capital) at the total price of VND 78 billion.  What is special about the deals is that all the three partners pledge to make long-term investment into Hoa Binh as they have signed in the agreements. This event has marked another successful step in the development strategy of Hoa Binh to become a powerful engineering-construction-real estate group of Viet Nam. DTCK magazine has had interviews with Mr. Le Viet Hai Chairman of BOM & CEO of Hoa Binh and Mr. Luu Quang Lam, Director of PVFC on their agreement.

 

DTCK: Why did Hoa Binh choose PVFC- HCM as the first local strategic partner after the two foreign strategic partners?
 

Mr. Le viet Hai: PVFC – HCM is a member of PetroVietnam Group whose capital is totally owned by the Group. This non-banking financial institution was established in 2000, has developed very fast and constantly made great accomplishments. PVFC – HCM has now become one of the strongest members of the Group as well as one of the biggest financial organizations in the country. At present its chartered capital totals VND 3,000 billion and is going to be increased to VND 5,000 billion shortly and up to VND 10,000 billion in 2010. Through correct policies and strategies together with energetic and aspiring human resources, PVFC – HCM is very likely to grow more powerfully in the coming years. Therefore we could say that this is the right time for our two companies to become strategic partners of each other.

 

 DTCK: Some people think that strategic partnership agreements have recently become something rather boring. What do you think about this opinion and could you tell us where the “true value” of your recent strategic partnership agreements lies?

 

Mr. Le Viet Hai: Strategic partnership agreements usually come into existence between companies due to the current trend of mutual development. This might seem boring to readers but we cannot underestimate this kind of cooperation because it depends on degrees of cooperation. The cooperation between Hoa Binh Corp and PVFC – HCM is a long-term one which is materialized by the fact that PVFC has become HBC’s strategic partner by buying 1.2 million HBC shares at the price totaling VND 78 billion. In our agreement there is an article limiting the transfer of shares to a third party: only 30% at most within the first year, 20% at most in the next 2 years and 50% at most after 5 years provided that there is a written consent from HBC. This shows our goodwill for long-term cooperation for mutual development

 


Mr. Đinh La Thăng, Member of the VN Communist Party Central Committee, Chairman of PetroVietnam BOM (left) congratulates Mr. Le Viet Hai HBC Chairman of BOM  & General Director (right) at the signing ceremony of strategic partnership between HBC & PVFC-HCM


Strategic cooperation between the 2 companies will not only bring about more business opportunities but also serve as a basis for fast realization of development projects as well as reduction of time in carrying out works. According to the agreement, PVFC will not only help HBC in providing capital but also in giving consultation on financial management; on evaluation, selection and  business operation of investment projects. On the other hand PVFC-HCM will be given priority in joining in projects carried out by HBC; HBC will provide PVFC-HCM with products and services as best it can in accordance with HBC’s policies. Besides, the two parties also pledge to cooperate closely in designing and exploiting products and services of joint brand name, in communications and publicity programs; to collaborate in other areas in accordance with current laws and mutual interests.

 

DTCK: After the agreement has been signed, do HBC and PVFC-HCM have any plan or agenda to materialize the cooperation commitment and make it more effective?

 

Mr. Le Viet Hai: Right after the agreement has been signed we went on signing a memorandum for the collaboration in the building of a commercial center and five-star hotel complex, 36-storey high, in the center of Nha Trang.

With close cooperation the two sides will together try to seize investment opportunities and do our best to make them realistic.

This is going to be a combination of, on the one hand, the experience in construction work and project management of HBC and, on the other hand, the competence in arranging capital for investment and in providing financial solutions for projects of PVFC-HCM.

Apart from investment in real estate development, PVFC-HCM through collaboration with its big partners and with its many large scale construction projects will certainly create favorable conditions or Hoa Binh Corp to expand its construction market.

We are building plans for project investment between the two companies in the near future.  

 

DTCK: Does Hoa Binh have any guidelines in “selecting” strategic partners in its next offering of stocks for sale to increase the chartered capital?

Mr. Le Viet Hai: According to development policies initiated by the 2007 general shareholders’ meeting, HBC is to raise its chartered capital (in stage 2) to VND 150 billion to meet the needs of growth, the selection of strategic partners is an important matter. As strategic partners of each other, the two sides must appreciate long-term cooperation, mutual support and must share the same point of views.

 

As a member of PVFC, could you explain why you have chosen HBC for your investment and have become HB’s strategic partner with agreement that opens up all-round cooperation in the future? Do you think you are “far-sighted” enough to see the potentiality for development of a big brand name in the area of construction and real estate that is listed on stock market?

 

Mr. Luu Quang Lam: In accordance with its development strategy, PVFC is diversifying its relationships, and expanding cooperation with prestigious organizations in all areas. Through our study, we know that Hoa Binh has earned high prestige in the area of construction and real estate and its brand name has been much esteemed by local and foreign investors. Apart from that Hoa Binh also has a staff that is highly professional, experienced and devoted. Moreover, having the same development direction as PVFC-HCM, HBC is strengthening its cooperative relationships by signing agreements of strategic partnership with Chip Eng Seng (Singapore) and Citadel Investment Fund (US). The fact that PVFC-HCM has officially become a strategic partner of HBC is the realization of that direction. 

We believe that, through our cooperation, the relationship between the two companies will become much closer and will bring long-term benefits to both sides and social economic effects to the country as well.


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