FPT Vietnam to sell stake

One of Vietnam’s largest private tech firms, FPT Corporation is planning to sell a large stake in its retail and distribution units, providing an opportunity for regional players to buy into the fast-growing Vietnamese market.

Funds from the sale will be used to help with mergers and acquisitions (M&A) in the information technology area.

At a shareholder meeting, the company said it will reduce its holdings in FPT Shop, a mobile device retailer, and FPT Trading, which makes, imports and sells telecommunications and electronic products.

FPT Shop has reached its target of having 250 outlets by this year, and the distribution arm’s profit margins are steady 46 per cent, the meeting was told. FPT still expects the major part of its revenue to come from retail and distribution, estimated at VND28.58 trillion (US$1.27 billion) – about 63 per cent of turnover.

“The IT industry has a lot of potentials, and the opportunities are universal,” says deputy-CEO Nguyen The Phuong.

He says some of the money raised will be used to increase the company’s stake in FPT Telecom.

FPT chairman Truong Gia Binh last year unveiled his goal to invest US$50 million through M&A every year, in both local and international companies. The targeted markets include the US, Japan, Singapore and Europe. Two years ago, the company acquired RWE IT Slovakia for an undisclosed amount and rebranded it to FPT Slovakia.

One of the main competitors of FPT Shop, Mobile World, has expressed an interest in buying the retail unit. Another candidate could be Thailand’s Central Group, which bought 49 per cent of Vietnamese electronics retailer Nguyen Kim early last year and reportedly wants to also acquire Pico, another local electronics store.

FPT Vietnam has retained VietCapital Securities and Japan’s Nomura Securities for advisory services on the sale.