Vietnam’s diversified company Masan Group is seeking to raise up to $1 billion for its animal feed unit, according to a Bloomberg report on Thursday.

The conglomerate is exploring options including a strategic stake sale for the unit, which is operated by subsidiary Masan MEATLife, the report said.

Shares of Masan MEATLife currently trade on Vietnam’s Unlisted Public Companies Market (UPCoM) — a small bourse for companies before they go public on Vietnam’s main stock exchanges — and are valued at $810 million. The company leadership feels the unit is “under-appreciated by the market,” said the Bloomberg report.

Masan Group had not responded to DealStreetAsia’s request for comment at the time of publishing.

Major investors that have injected hundreds of millions of dollars in Masan businesses, including Singapore wealth fund GIC, global private equity firm KKR and South Korea’s SK Group, had also not responded to queries on Masan’s fundraising and their willingness to participate in it.

Masan Group had earlier told local media it was planning an initial public offering (IPO) for Masan MEATLife in 2022-23. The company also said it hoped to obtain a 10% share of the local $10.2 billion meat market and earn $2 billion in revenue by 2022.

Masan MEATLife recorded 16.12 trillion dong ($696 million) in revenue in 2020, up 17% year-on-year, and a net profit of 263 billion dong ($11.4 million), up 41%.

The company operates what it calls a feed-farm-food model that spans the entire value chain from animal feed production to retail sales of its meat products to end-users. It claims its MEATDeli-branded meat products were being sold at more than 1,600 sale points by the end of last year, including Masan’s supermarket and convenience store network VinMart that it took over from local conglomerate Vingroup. Masan MEATLife said in its 2020 annual report that it expects to reach 4,200 sale points by the end of this year.

The company currently has 13 factories with a total production capacity of 3.3 million tonnes per year.

Masan MEATLife acquired animal protein firms ANCO and PROCONCO in 2015 and merged them into its platform. It also owns a stake in state-owned food firm Vissan and recently acquired a 51% interest in local meat processor 3F Viet.

KKR had invested $150 million in Masan MEATLife in 2017, a deal that made the New York-headquartered private equity major the second-largest shareholder in the firm after its parent group.

Masan Group has interests across the agriculture, consumer goods, retail, financial services and natural resources sectors. In retail, the group acquired VinCommerce, the operator of VinMart supermarkets and convenience stores, and agribusiness unit VinEco from Vingroup in 2019.

SK Group last month acquired a 16.26% stake in VinCommerce for $410 million. The Korean group had earlier put $470 million in Masan Group.

In financial services, Masan Group owns 15% in Techcombank, a $7.5 billion commercial lender headquartered in Hanoi.

Source DealStreetAsia