HANOI (Reuters): South Korean electronics company LG Innotek will raise its investment in its plant in the Vietnamese port city of Haiphong to $1 billion in the next two years, Vietnam's government said on Monday.
The move will take the company's total investment in the Southeast Asian country to about $2 billion, the government said in a statement.
The announcement follows a visit to Vietnam by South Korea's president last week.
In another development, Vietnamese conglomerate Truong Hai Group, founded by tycoon Tran Ba Duong, is considering bringing in an investor into its automobiles arm Thaco Auto in a deal that could value the unit at around $5 billion, two people familiar with the matter said.
Truong Hai Group is in talks with a financial advisor to explore the potential sale of a minority stake in Thaco Auto after receiving interests from regional financial investors and corporates, the sources said.
The group could be selling about 20% in Thaco Auto, one of the sources said. Deliberations were ongoing and no decisions have been made, the sources said, declining to be named as the matter is private.
Funds raised could be used to finance Truong Hai Group's properties projects, one of the sources said.
Thaco Auto, manufactures and distributes vehicles including passenger cars and motorcycles from brands ranging from KIA to BMW to its own Thaco brand of buses, according to its website. It has over 400 showrooms and service centers across the country and seven factories.
Truong Hai Group is also a developer of residential and commercial properties, including the over 1 million square metre urban project called Sala City in Ho Chi Minh City.
Troung Hai Group and Thaco Auto did not respond to requests seeking comment.
The potential deal comes at time when the Vietnamese government is aiming to boost localisation rates in its automotive sector and investments into the development of electric vehicles to become a regional hub for automobile production and exports.
Vietnam, home to a population of almost 100 million, still has foreign carmakers such as Toyota and Honda dominating its automotive sector but local brands such as VinFast and Thaco Auto are fast gaining prominence in part due to support from the government.
Founded in 1997 in Dong Nai province near Ho Chi Minh City, Truong Hai Group, formerly known as Truong Hai Auto Corp, started as a used vehicles trader and repairer, according to its website.
It later expanded to become a conglomerate with six businesses including automobiles, agricultural production, construction and logistics, its website shows. - Reuters
