VEIL/Dragon Capital Group

completed

DCGL was established in BVI in 1994 with operational interests in Vietnam. In 1995, DCGL established VEIL whose objective is to invest, directly or indirectly, in publicly or privately issued securities (equities and bonds) of companies, projects, and enterprises issued by Vietnamese entities, whether inside or outside Vietnam, usually via equities or convertible bonds with the preferred exit strategy of a listing on a local exchange. As with previously executed investments in the financial sector of developing markets, IFC is acting as an institution builder, neutral broker, and catalyst. The objectives of this project are to: (1) support the Vietnamese government''s recent market reform initiatives, and (2) promote the development and increase the liquidity of the Vietnamese securities market. These objectives are envisaged to be achieved by: (1) increasing the participation of VEIL in the equitisation process by strengthening VEIL''s capital resources and encouraging the fund to list its portfolio on the local securities exchange, thereby promoting its development and increasing its liquidity, and (2) furthering good corporate governance in DCGL, making it an example to be emulated by Vietnamese companies. The project presents an opportunity for IFC to strengthen DCGL with the aim of introducing best practices in Vietnam’s fledging merchant banking industry by: (1) increasing VEIL’s participation in the equitisation process by strengthening its capital resources; (2) through the induction of IFC and the co-investor, implementing good corporate governance as an example that can be emulated by Vietnamese companies and; 3) playing a catalytic role to assist DCGL & VEIL to induce additional investments mainly from international institutional investors. IFC’s involvement will also signal to the market IFC’s confidence in the development potential of the Vietnamese capital market.IFC''s investment will: (1) catalyze institutional investors interest; (2) through VEIL, promote and develop Vietnam''s private sector and capital markets; and (3) assist in the development of VEIL as an access vehicle for institutional investments into Vietnam. This project will indicate IFC''s confidence in the future of the Vietnamese market and highlight IFC''s support of the Vietnamese government''s in its efforts to reform the financial sector.