Mekong Capital invests in Vietnamese manufacturer

Mekong Capital is increasing its investment in a company it first backed in early 2004 - a magnet wire manufacturer in Vietnam ahead of a company listing scheduled for 2008.

Mekong Capital, a Vietnam-focused private equity investment fund manager, is planning to invest up to $6.25 million (€4.8million), of which an initial $1.91 million has already been invested, in Ngo Han Joint Stock Company. The Ho Chi Minh-based fund manager expects to invest more capital from Mekong Enterprise Fund II, a $50 million investment vehicle, after laws on foreign ownership in private companies are clarified, according to a statement.

In early 2004, Mekong invested $1.85 million from its maiden fund –launched in 2002 – in the magnet wire maker, which has around 200 employees.

Chris Freund, managing director of Mekong Capital said: “Since our first fund invested in Ngo Han in early 2004, Ngo Han’s revenues have grown at 57 percent per year over those three years, while their net profit has grown at a rate of 60 percent per year over those same three years.”

Ngo Han’s 2006 revenue is to reach $35 million, according to the statement.

The company is planning to list on Vietnam stock market in 2008, Freund said. Mekong Enterprise Fund II focuses on investments in companies, which are typically two to 4 years away from a listing in Vietnam.

Ngo Han marks Mekong Enterprise Fund II’s second investment. The first investment from the fund was in International Consumption Products Joint Stock Company, a consumer products company which owns several local brand names.