Original disclosure @ IFC website
Updated in EWS Aug 26, 2022
Disclosed by Bank May 23, 2022
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According to IFC documents, the proposed investment consists of (i) a VND600 billion convertible bond and (ii) a VND300 billion senior bond to BaF Vietnam Agriculture Joint Stock Company (BaF or the Company) to support the Company’s capacity expansion of its farm and food business across Vietnam (the Project). The Project is expected to provide BaF with a significant platform and presence in a fragmented market. With Vietnam’s pork sector severely impacted by African Swine Fever (ASF), BaF’s expansion is expected to contribute to a recovery of pork supply as well as an improvement in biosecurity across Vietnam.
The Project includes the Company’s operations involving 13 sow farms, 18 hog farms, 1 slaughter and processing factory, and 2 feed mills at the following identified locations across Vietnam (locations not listed are as yet unidentified):
Slaughter and processing factory:
The financing package will help strengthen the Company's capital structure and improve liquidity. This has been proposed to be as important during the current period of market disruption, as the industry has been severely affected by outbreaks of ASF and is experiencing additional turmoil stemming from the COVID-19 pandemic. Knowledge, innovation and capacity building: IFC is looking to provide technical expertise and facilitate knowledge sharing on animal welfare best practices. As part of this initiative, IFC is exploring an opportunity to provide advisory services to support the Company with designing and implementing a group housing transition for its pig farming operations. Standard setting: IFC will support BaF to implement best practices through raising the level of compliance to that of IFC's Performance Standards, European-level animal welfare standards, and industry best practices.
The Project is assessed as part of IFC Agribusiness’s African Swine Fever (ASF) Regional Recovery Program, to respond to the impacts of ASF on the regional pork industry. The most significant, expected Project-level outcome resulting from this expansion is the impact on consumers from the provision of safe pork at the time of severe supply shortage as well as implementation of advanced biosecurity procedures at the new farms. At the market level, the Project, alongside other planned investment, and advisory interventions, is expected to promote market resilience through improvement of biosecurity and disease management, both by supporting industry consolidation and disseminating best practices among smaller players.
The Project is to support BaF’s 2021 – 2023 capex expansion plan totaling US$352.7 million equivalent and includes building and machinery for 13 sow farms, 18 hog farms, 2 feed mills, 1 slaughter and processing factory, and other costs for biological assets, systems, and office.
The Project is expected to be funded by a combination of debt, quasi-equity / equity, and internal cash generation. The IFC investment will consist of a VND600 billion Convertible Bond (US$25.9 mn equivalent) and a VND300 billion senior bond (US$13.0 mn equivalent).
The project Sponsors are (i) Mr. TRUONG Sy Ba, the Chairman and Founder of Tan Long Group Joint Stock Company (Tan Long Group), (ii) Tan Long Group, and (iii) Siba Holdings Joint Stock Company (Siba Holdings). Mr. Truong Sy Ba holds 88% ownership of Tan Long Group, and 98% ownership of Siba Holdings.
Tan Long Group is the leading commodity trader of animal feed raw materials in Vietnam. Siba Holdings, an entity holding the farming, food, and technology assets of Mr. Truong Sy Ba, is the largest shareholder in BaF, with 20.5% ownership. Mr. Truong Sy Ba was appointed as the Chairman of BaF in March 2022.
BaF Vietnam Agriculture Joint Stock Company
Mr. Phan Ngoc An
+84 098 959 7219
44/16 group 16, Dong Quarter, Vinh Phu Ward, Thuan An City, Bình Duong Province, Vietnam
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