Mobifone and AVG cancel acquisition deal
Mobifone`s billion-dollar acquisition of multimedia company Audio Visual Global (AVG) has been cancelled, announced the related parties on March 12.
Under the agreement, AVG will refund the entire contract amount reportedly worth VND8.9 trillion (US$392 million) to Mobifone, including interest, after the telco's decision to purchase 344.66 million AVG shares was revoked.
Mobifone's billion-dollar acquisition of multimedia company Audio Visual Global (AVG) has been cancelled.
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Concurrently, the two parties will try to minimize potential financial hits from the decision.
Pham Nhat Vu, AVG's representative at the meeting, has agreed not to exercise the penalty clauses and request compensation after the deal was revoked. In addition to the refunded contract value, AVG will reimburse Mobifone for any expense during the transaction process.
The deal caused great controversy as its value was 2.58 times higher than AVG's charter capital of VND3.6 trillion (US$158 million) at the time of completing the transaction on January 2, 2016.
The investment in AVG was equivalent to 55% of Mobifone's charter capital (VND16.2 trillion or US$711 million) and 40% of its total assets (VND23.2 trillion or US$1.02 billion) as of June 30, 2016.
On September 6, 2016 the Government Inspectorate announced their decision to investigate Mobifone over the deal.
The investigation was to last for 50 days, however, the process has been dragged out to nearly one and a half years since then. The investigation's final results, to date, have yet to be announced to the public.
The Secretariat of the Party Central Committee, in an announcement released by the Party Central Committee's Office on March 8, stressed that this is a complex, serious, and sensitive case, drawing special attention from the public.
The Secretariat of the Party Central Committee requested the Government Inspectorate to take responsibility for its conclusions on the case and disclose their findings to the public in accordance with the law.
Any sign of violations, therefore, would be subject to criminal probes.
AVG was established in 2008 and rolled out its television services in 2011. Its subscribers in 2014 numbered around 450,000, accounting for some 4.5% of Vietnam's 9.9 million subscribers at the time. The company was founded by Pham Nhat Vu, the younger brother of Vietnam's first billionaire Pham Nhat Vuong.
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