| Case Study: Vedan International (Holdings) Limited |
Case Study: Vedan International (Holdings) Limited
Customer Profile
Vedan manufactures and sells fermentation-based food additives, biochemical products and cassava starch-based industrial products including modified starch, glucose syrup, monosodium glutamate (MSG), soda, acid and beverages. The products are sold to food distributors, international trading companies, and manufacturers of foods, paper, textiles, and chemical products in Vietnam, other ASEAN countries, China, Japan, Taiwan, and several European countries.
Business Situation
With its rapid expansion, Vedan capitalised on its excellent growth potential and sought to be publicly listed on the Hong Kong Stock Exchange (HKEx). However, when SARS struck the region in 2003, investors became cautious.
Solution
With an investment of USD 15 million prior to its initial public offering (IPO), we advised the company on reorganisation and assisted in its preparations for public listing. When the SARS crisis hit, we leveraged on our regional network and organised a non-deal roadshow for Vedan in Singapore. In anticipation of switching the listing to Singapore, we introduced Vedan's management to Singapore-based investors. As a result, we managed to heighten investor interest and re-engaged the Hong Kong investors. Galvanised by the strong interest from Singapore, a recovering SARS situation and Vedan's strong growth story, the Hong Kong investors backed Vedan's IPO and ascribed
a good listing multiple.
Results
In June 2003, Vedan was listed on the HKEx where we managed the company's IPO and worked closely with DBS Vickers to distribute the offering. The institutional tranche was 8 times subscribed and the retail tranche 156 times subscribed, demonstrating the value of combining our equity capital markets origination expertise with our broad distribution network for a strong equity story like Vedan's.