Vingroup stops participating in Fitch credit rating program

admin — Wed, 03 Jul 2019 07:27:50 +0000

VinFast’s sedan is seen at the Paris Motor Show in France on October 2, 2018. Photo by VnExpress.

Fitch will no longer provide assessments of Vingroup’s credit rating after the latter chose to stop being rated.

The global rating agency said Tuesday it will no longer provide ranking results for Vingroup. Vingroup representatives confirmed the above information to VnExpress, saying the group had “actively withdrawn” from Fitch’s programme. They did not elaborate.

Corporation credit rating is a service provided by esteemed financial organizations such as Fitch, Moody’s, or Standard & Poor’s at the request of businesses. The credit rating results are often an important requirement when businesses want to raise capital in the international market.

Together with Standard & Poor’s and Moody’s, Fitch Ratings is one of the three world’s most prestigious credit rating organizations.

Fitch first assessed Vingroup’s creditworthiness in November 2012, giving it a “B+”Default Rating for both foreign and local-currency debt issuer categories, as well as a “stable” outlook.

Vingroup maintained its B+ rating consistently until its latest credit assessment. However, in its October 2018 credit rating report, Vingroup’s outlook was lowered from “stable” to “negative” for its expansion into car manufacturing.

The adjustment followed Vingroup’s earmarking $3.1 billion for capital expenditure for its auto venture, of which $1.4 billion was debt funded, Fitch said last October.

The “negative outlook” assessment reflected “Vingroup’s heightened business risk and our estimates that leverage, defined as net debt/adjusted inventory, is likely to rise to 58 percent in 2018, before falling to 36 percent in 2019,” the ratings agency said.

But Vingroup vice president and CEO, Nguyen Viet Quang, said that the company had foreseen this. “Investing in auto manufacturing is risky and therefore being downgraded is unavoidable,” he told VnExpress.

“The only way not to be downgraded is not doing this project in the first place.”

Vingroup’s VinFast $1.5 billion car manufacturing complex in Hai Phong inaugurated a new automobile factory in the middle of June, three months ahead of schedule. The corporation’s first cars, which were VinFast Fadil CUVs, were delivered to customers on July 17.

The post Vingroup stops participating in Fitch credit rating program appeared first on Tin tức mới nhất hàng đầu Việt Nam cập nhật liên tục 24h.

Vietnames retailers expanding faster than foreign peers

admin — Sun, 26 May 2019 01:26:18 +0000

Local retail firms are expanding quickly while foreign counterparts stagnate or quit due to fierce competition.

The number of convenience stores in the country from April last year to April this year had risen by 72 percent year-on-year to over 3,100, according to Ho Chi Minh City market research firm Q&Me. That means 1,300 convenience stores came to the market in just one year.

Half of them, 660, came from Vinmart+, a convenience store chain of Vietnam’s largest conglomerate Vingroup. This is a growth of 82 percent. In the same period, supermarket chain Vinmart saw its number of store risen by 82 percent to 120 outlets.

Bach Hoa Xanh, a retail unit of the country’s major phone seller Mobile World (MWG), now has over 500 department stores after incorporated in 2015. It is seeing strong growth with VND4.3 trillion ($184 million) in revenue last year, three times that of 2017.

The market has recently seen strong merger and acquisition activities, with Vingroup’s retail arm VinCommerce buying out convenience store chain Shop&Golast month and supermarket chain Fivimart last October.

Vietnam’s retail market has become increasingly crowded with both local and international players over the last five years. Although experts have said that the market has a lot of growth potential, many foreign businesses have quit or scaling back expansion plans.

French supermarket group Auchan Retail might be the newest player to withdraw from the market.

Auchan’s 15 out of 18 supermarkets will stop operating on June 3. Its CEO Edgar Bonte said that their business in Vietnam generated revenues of 45 million euros ($50.4 million) last year, but was making losses. He did not provide figures of the losses.

Bonte told French newspaper Les Echos last week the company had decided to sell its stores in Vietnam.

A source from the company, who wished not to be named, said the firm is negotiating with a few retailers to sell the outlets and the negotiations “are expected to end before Auchan withdraws from Vietnam early next month.”

Germany-headquartered Metro was sold to a Thai investor in 2014 and disappeared from the market ever since, while Malaysia’s Parkson has been closing down its mallssince 2015.

Other convenience store chain has failed or will unlikely meet its initial expansion target. Japanese Ministop had only 115 stores as of April, even though it had planned to have 800 by last year.

Japanese convenience store chain FamilyMart saw its store number dropped by nine to 151 from last April to this April, while its initial plan was to have 1,000 stores by next year.

Vietnam’s revenue from selling goods last year rose by 11.7 percent from 2017 to $142 billion, up 12.4 percent from 2017.

The post Vietnames retailers expanding faster than foreign peers appeared first on Tin tức mới nhất hàng đầu Việt Nam cập nhật liên tục 24h.

Vingroup - Tin tức mới nhất hàng đầu Việt Nam cập nhật liên tục 24h

Vingroup stops participating in Fitch credit rating program

Fitch will no longer provide assessments of Vingroup’s credit rating after the latter chose to stop being rated.

Vietnames retailers expanding faster than foreign peers

Local retail firms are expanding quickly while foreign counterparts stagnate or quit due to fierce competition.