Vietnam Infrastructure Limited last updated its investing policy in November 2009 in accordance with AIM Rule 8.
Vietnam Infrastructure Limited (“VNI” or “the Company”) is a closed-end investment company incorporated in the Cayman Islands with the primary objective of achieving long term capital growth of its assets and increasing the value of the invested capital through investments in a diversified portfolio without any restriction regarding the industry sector or the geographic location.
VNI is managed by VinaCapital Investment Management Ltd (“VCIM” or the “Investment Manager”), a Cayman Islands company. VCIM was established in 2008 and currently manages three listed and a few unlisted investment companies. More information about the VCIM management team is available here.
The Company will adhere to the following investment policies and restrictions:
- The Listed Portfolio investing policy:
The Listed Portfolio holdings would be sufficiently diversified to satisfy the UCITS investment requirements and to allow the Listed Portfolio to be broadened to meet the wider Vietnam focused investment policy of VVF, to which the Listed Portfolio has been contributed. The Company, with respect to the Listed Portfolio, is able to invest in a wide range of assets, including shares, corporate and government bonds, and other types of securities and derivatives but with a particular focus on investing in listed securities, across all sectors, primarily those issuers that are: (i) listed, traded or dealt on the HOSE or HNX; or (ii) those issuers that carry out a substantial part of their economic activity in Vietnam and are listed, traded or dealt on stock exchanges worldwide. This investing policy mirrors the investment policy of VVF and, following the transfer of the Listed Portfolio to VVF, the Company's investing policy in relation to the Listed Portfolio shall be adhered to by the Company holding Class A VVF Shares.
- The Private Equity Portfolio investing policy:
With effect from Admission, the Company will seek to realise its Private Equity Portfolio investments at the best available value and in a reasonable timeframe with a target exit date of no later than 30 June 2017.
This target exit date of 30 June 2017 will coincide with the Company's scheduled continuation vote in 2017. The Company believes that, in light of current market conditions, the realisation of the Private Equity Portfolio should be completed by 30 June 2017. The Company has ceased to make new private equity investments. However, as per the Company's Private Equity Portfolio investing policy, the Company may, subject to Board approval, commit further funds to an existing private equity investment, with the intention of maximising the investment's value and assisting in its eventual realisation.
- The Directors will review the investment policies on an annual basis and, subject to their review and in the absence of unforeseen circumstances, the Company intends to adhere to the above investment policies for at least three years following Admission.
- Changes to the investment policies may be prompted, inter alia, by changes in government policies or economic conditions which alter or introduce additional investment opportunities. In the event of a breach of any investment restrictions, the Investment Manager shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification shall be made to a Regulatory Information Service Provider.
- Investors should note that while it is the intention of the Company to invest its funds as far as practicable in accordance with the investment strategy, objectives and policies outlined in this document, due to market and other investment considerations, it may take some time before the funds of the Company are fully invested.
- Cash pending investment, reinvestment or distribution will be placed in bank deposits, bonds, government-issued treasury securities or in local money market funds for the purpose of protecting the capital value of the Company’s cash assets and earning interest.
- In order to hedge against interest rate risks or currency risk, the Company may, where appropriate, also enter into forward interest rate agreements, forward currency agreements, interest rates and bond futures contracts and interest rate swaps and purchase and write (sell) put or call options on interest rates and put or call options on futures on interest rates.
Valuation policy and reporting
The Net Asset Value per Share of each class of Shares shall be calculated (and rounded to four decimal places) in US Dollars by the Administrator (or such other person as the Directors may appoint for such purpose from time to time) on a monthly basis (or at such other times as the Investment Manager may determine but in any event at least quarterly) in accordance with IFRS. The Net Asset Value shall be the value of all assets of the Company attributable to the relevant class of Shares less the liabilities of the Company attributable to the relevant class of Shares determined in accordance with the valuation guidelines adopted by the Directors from time to time.
Under current valuation guidelines adopted by the Directors, such values shall be determined as follows:
Regarding the VVF Shares:
The net asset value of the VVF Shares will be calculated on each VVF Valuation Day in accordance with the terms and conditions set out in the Forum One Prospectus, the VVF Data Sheet, and the VVF KIID. The net asset value of the Class A VVF Shares will be published on a daily basis on Fundsquares website here
It is intended that the daily net asset value of the VVF Shares shall also be made available on
- VinaCapital Investment Management Ltd's ("The Investment Manager") website here
- VinaWealth's website here; and
- The Company's website here.
Regarding the Listed Portfolio Shares:
The Net Asset Value per Share of a Listed Portfolio Share shall be calculated by reference to:
- the number of Class A VVF Shares held by the Company multiplied by the net asset value per Class A VVF Share published on EdR Asset Management’s website and other sources;
- added to this will be any cash balance attributed to the Listed Portfolio Shares as well as any dividends and interest accruing to the Listed Portfolio Shares;
- deducted from this will be any outstanding liabilities attributed to the Listed Portfolio Shares; and
- divided by the number of issued Listed Portfolio Shares.
Regarding the Private Equity Portfolio:
The Net Asset Value per Share of a Private Equity Share shall be calculated by reference to:
- the value of any cash in hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received, shall be deemed to be the full amount thereof, unless in any case the Directors shall have determined that the same is unlikely to be paid or received in full, in which case the value thereof shall be arrived at after making such discount as the Directors may consider appropriate in such case to reflect the true value thereof;
- unquoted investments will initially be valued at cost price, which will include any expenses relating to their acquisition and a revaluation of unquoted investments to a value in excess of or below cost may be made in the circumstances provided by and in accordance with the guidelines issued by the British Venture Capital Association or any successor body. Notwithstanding this, the Investment Manager shall estimate the fair value of each unquoted investment at least annually; and
- any value other than in US Dollars shall be translated on the balance sheet date at any officially set exchange rate or appropriate spot market rate as the Directors deem appropriate in the circumstances having regard, inter alia, to any premium or discount which may be relevant and to costs of exchange. Save that Vietnamese Dong shall be converted into US Dollars at the "transfer exchange rate" posted on the Vietcombank website on the relevant valuation day.
If the Directors consider that any of the above bases of valuation are inappropriate in any particular case or generally, they may adopt such other valuation or valuation procedure as they consider is reasonable in the circumstances provided that such other valuation or valuation procedure has been approved by the Company’s auditors. The Directors may delegate to the Investment Manager any of their discretions under the valuation guidelines.
The Board intends to announce the unaudited NAV per Share of each class of Shares as at Admission and following Admission the unaudited Net Asset Value per Share of each class of Shares will be calculated each month and announced by the Company through a Regulatory Information Service. The calculation of the Net Asset Value per Share of each class of Shares will only be suspended in circumstances where the underlying data necessary to value the investments of the Company cannot readily, or without undue expenditure, be obtained or in other circumstances (such as a system's failure of the Administrator) which prevents the Company from making such calculations. Details of any suspension in making such calculations will be announced through a Regulatory Information Service as soon as practicable after any such suspension occurs.
Co-investments and third party investors
In cases where investments are too large for the Company given its diversification requirements or where the Company has insufficient funds, the Company may co-invest in investment opportunities with third party investors, or invite third party investors to co-invest in investment opportunities led by the Company, including entities that are affiliated with or managed by the Investment Manager (such as VinaCapital Vietnam Opportunity Fund (“VOF”), VinaLand Limited (“VNL”) or DFJ VinaCapital) or its affiliates. The Company may also invest in partnership with SOEs or by way of joint venture partnerships with reputable developers. Such third party investors may have investment objectives and policies that differ from those of the Company. Although the Company may not have control over these investments and may therefore have a limited ability to protect its position therein, the Investment Manager expects appropriate rights will be negotiated to protect the Company’s interests. Shareholders or other affiliates of the Investment Manager may also be invited to co-invest in Investee Companies on terms no more favourable than the terms on which the Company invests. This invitation will only be made when the Investment Manager is satisfied that the interests of the Company and its Shareholders will not be prejudiced by such invitations.
The Manager may from time to time manage other funds which have a similar or different investment objective and policy to that of the Company. Nevertheless, circumstances may arise where investment opportunities will be available to the Company and which are also suitable for one or more of the other funds managed by the Manager. Where a conflict arises in respect of an investment opportunity, the Manager will allocate the opportunity on a fair basis. In such event, the allocations will normally be made on a pro rata basis between the Company and the other funds based on the amounts available for investment in each fund at the time the investment opportunity arises. However, the Manager will be entitled to recommend to the Board the allocation of investment opportunities on a basis otherwise than as set out above if it deems it appropriate. In those circumstances the Board will determine what level of investment the Manager may make on behalf of the Company.
The Manager may also from time to time manage one or more funds incorporated in Vietnam. If appropriate, therefore, the Company may be able to invest in local companies or projects up to the foreign ownership restriction then existing with the local fund making additional investment in order to gain control of that company or project. This facility would allow the Company to benefit from majority participation in local projects thereby reducing the risks which may be associated with the use of locally established co-investors/partners and thereby also allowing effective overall control to be exercised by the Manager alone.
Distribution policy and discount control
The principal investment objective of the Company is to provide Shareholders with capital appreciation by investing in a portfolio of entities owning infrastructure and infrastructure related assets in Vietnam and surrounding Asian countries. The Company intends to reinvest realised returns from investments into new investments that adhere to the strategy, policies and restrictions governing the Company. The Directors reserve the right, but do not intend and are not required, to provide returns to Shareholders by making dividend or capital distributions. As the Company is a closed-ended investment vehicle whose shares are admitted to trading on the AIM, there is always a risk that the applicable quoted price of the Ordinary Shares may fall to a discount to its prevailing Net Asset Value per Share.
In the event that the Ordinary Shares trade at a substantial discount to the then prevailing Net Asset Value per Share for an extended period of time, the Board will consider the most appropriate method of reducing the discount, which may include implementing a Buyback Programme. The making and timing of any buybacks will be at the absolute discretion of the Board and not at the option of Shareholders.
Life of the Company
The Company does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the Board intends to convene an extraordinary general meeting of the Company in 2017 where a special resolution will be proposed that the Company continue as presently constituted. If the resolution is passed, the Board intends that a similar resolution will be proposed at an extraordinary general meeting to be convened each fifth subsequent year thereafter. If the resolution is not passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.