SK Group, NPS may exercise put option on Masan without gain

South Korean institutional investors, including SK Group and National Pension Service (NPS), are likely to only recover their principal without profit via a put option on Vietnamese conglomerate Masan Group Corp., sources familiar with the matter said on Wednesday.

Korea’s SK consortium had a condition for an exit with the principal of $470 million in five years through a put option when it signed a shareholders’ agreement with Masan in 2018. The fund, worth 530 billion won at the time for a 9.5% stake in Masan, received a 270 billion won commitment from SK, 160 billion won from NPS and 100 billion won from IMM Investment Corp.

The put option period is for one year from October 2023. The exercise price is similar to Masan’s current stock, which closed at 81,500 Vietnamese dong ($3.4) on Sept. 6.

The SK consortium is likely to exercise the put rights as its commitment to Southeast Asian investments is not as strong as before, sources said.

SK established an affiliate for Southeast Asian investment in 2018 and created a 3 trillion won ($2.3 billion) fund for mergers and acquisitions in the region. The No. 2 conglomerate in Korea expected enormous growth potential in logistics, medical service and infrastructure in Vietnam at the time. However, its investments have yet to achieve significant performance.

Masan is among the top three largest companies in Vietnam in terms of market cap. Its major businesses include food and beverage, banking services and mining.

The Vietnamese conglomerate has suffered from illiquidity as it began to aggressively expand its auto and distribution businesses in the COVID-19 era. The stock, which surpassed 140,000 dong in October 2021, has plunged 43% since then.  

Write to Ji-Eun Ha at hazzys@hankyung.com

Jihyun Kim edited this article.