Thursday, 17 Oct 2019

Warburg Pincus plans acquisition of Vietnam’s Grand Ho Tram Strip casino resort

Updated at Friday, 22 Mar 2019, 12:14
The Hanoitimes - In 2017, analysts at Union Gaming Securities Asia estimated the gross gaming revenue of the Vietnam’s casino marketing at as much as US$1.2 billion.
Global private equity firm Warburg Pincus is said to be looking at acquiring Vietnam-based resort The Grand Ho Tram, DealstreetAsia reported.
Illustrative photo.
Illustrative photo.
The Grand Ho Tram, comprising of hotels, villas, a golf course and casinos, has an investment capital of US$4.2 billion and is located in the southern coastal province of Ba Ria – Vung Tau. 

An amount of US$1.1 billion has been disbursed in the first phase of the development, including hotel and resort facilities and a golf course that were opened in 2013 and 2014, respectively. 

In 2017, analysts at Union Gaming Securities Asia estimated the gross gaming revenue of the Vietnam’s casino marketing at as much as US$1.2 billion. However, access for local residents to casinos is limited.

According to DealstreetAsia, several firms, including Asian Coast Development, the parent of The Grand Ho Tram, and Sun City-backed Nam Hoi An, have submitted proposal to the Vietnamese government for a pilot program allowing local gamblers. 

However, the permission has been only granted to a Phu Quoc casino operator, located in the southernmost province of Kien Giang. 

The pilot will last for three years from 2019, which allows local Vietnamese citizens who are 21 or older and who have a regular income of at least VND10 million (US$441) per month to access and play at Vietnam-based casinos. 

In order to access a casino in Vietnam, Vietnamese players must buy an entrance ticket at the cost of VND1 million (US$44) per 24 consecutive hours, or VND25 million (US$1,100) per month. The entire proceeds from ticket sales shall go to the provincial budget where the casino is located.

Warburg Pincus is relishing its opportunities in Vietnam as the economy grows and capital markets develop, Jeffrey Perlman, Southeast Asia chief of the private equity firm told Reuters.

Perlman said the growth in Vietnam's capital markets to US$200 billion in value from some US$35 billion five years ago, was a big draw for global investors, and he expected local regulators to bring in more reforms to develop the markets. 

In 2016 Warburg Pincus also linked up with Vietnam's VinaCapital to invest up to US$300 million in a hotel venture Lodgis Hospitality

In May last year, the private equity major joined hands with Becamex IDC to establish a US$200 million logistics and industrial real estate investment vehicle.

Warburg Pincus’ first-ever investment in Vietnam was a US$200 million funding for Vincom Retail, the mall operator of Vietnamese conglomerate Vingroup, in 2013. The American investor has injected a US$100 million follow-on investment in Vincom Retail in 2015. Its most recent investment is a US$370 million injection in Techcombank.
Ngoc Mai
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