HÀ NỘI — VinaCapital has decided to stop investing in the Ba Huân Joint Stock Company and the two parties are negotiating to terminate this deal, the fund management firm announced on August 8.

This announcement came two days after Ba Huân JSC told the media that VinaCapital wanted to take control of the company and appropriate the Ba Huân brand.

In February this year, VinaCapital Vietnam Opportunity Fund (VOF), the flagship fund of VinaCapital, invested US$32.5 million in Ba Huân, which supplies fresh products and is well-known for its safe eggs in the southern region.

“When deciding to invest in Ba Huân JSC, we believed Ba Huân is a good business with strong development potential, and we would like to cooperate with Ba Huân to lift the company to a higher stage of development,” VinaCapital said in a media release on August 8.

“However, due to some misunderstandings between the two parties, we have decided to stop investment in Ba Huân and are discussing with the company to terminate this deal in the spirit of compliance with law and mutual benefits,” it said.

VinaCapital declined to disclose details of the signed contracts between the two parties due to privacy issues, but declared that it “has no intention of taking control or taking over Ba Huân and this is not part of the group’s business strategy”.

“Market practice”

VinaCapital has confirmed that the terms signed by the two parties were in accordance with market practices and similar to other investments made by the fund in the past and fully complied with Vietnamese law.

There were terms that protect the interests of investors but VinaCapital said they were consistent with market practices and were only applied when the business did not achieve the results projected by the company’s management board.

VinaCapital added that its investment valued the company higher than its market price based on price/earnings (P/E) ratio.

The fund also rejected Ba Huân’s claim that there were differences between English and Vietnamese contracts.

The fund said Ba Huân had received the terms sheet in English and the Vietnamese translation for comparison, reviewing all main terms in the contracts before signing this memorandum of understanding (MoU) in October 2017.

Ba Huân had over six months since the time of starting negotiations, drafting contracts and signing the MoU as well as formal contracts. The company sought advice from professional consultants so they fully understood its obligations, VinaCapital said. — VNS