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Vietnam online gaming firm VNG considers private placement before IPO abroad

Vietnamese technology startup VNG Corporation is in talks with institutional and strategic investors for a private placement ahead of its planned listing on the Nasdaq Stock Market which would take up 18 to 24 months.

The company whose investors include Goldman Sachs Group and Singapore’s sovereign wealth fund GIC, signed a memorandum of understanding to list on Nasdaq after receiving regulatory approval from the Vietnamese government.

VNG has not provided any details for its proposed listing in the United States, but has only said that Nasdaq could be helping it prepare for the listing. At present, foreign investors in total hold around 44.6 percent in VNG.

While talks for a private placement are at a very early stage, it was reportedly said that the pre-IPO placement would open up to existing investors including Goldman Sachs, Tencent, and GIC, as well as private equity major Warburg Pincus among others.

It is also learnt that the company has yet to initiate the formal process for a private placement nor sought the board’s approval for this move. However, this pre-IPO private placement were to be successful, it would reduce IPO size as well as ensure adequate funding.

Founded in 2004, VNG started out as an online gaming startup before following a strategy adopted by China’s Internet Giant Tencent where it branched out into other sectors including digital content, chat, payments, and e-commerce.

The company posted a revenue of VND 3 trillion in 2016, increasing 45 percent year-on-year. Its profit after tax in the fiscal also saw a tremendous increase of 135 percent to reach over VND 543 billion (about US$23.89 million).

This year, VNG expects to significantly increase its revenue to VND 908 billion (about US$40 million). The company’s main focus in 2017 is to expand internationally by boosting investment into its business verticals to reach new markets and acquire more users.

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