Interesting tidbit released by BJC today, their IFA has advised that shareholders should reject the transaction for multiple reasons (see below). I doubt that this will derail the acquisition but interesting to note nonetheless.
1) Risk concerning the loan financing and money transfer to Metro Vietnam’s Capital Account in advance for the whole amount of EUR 655 million, whilst having the uncertainty on obtaining the amended Investment Certificate and/or having the uncertainty on the period to receive such money back in case the agreement between the counter parties is terminated.
2) Total amount of money required for entering into the Transaction is EUR 1,310 million which BJC is having the risk to obtain the additional loan financing.
3) Litigation risk : According to the Company’s legal advisor, in case the Company’s shareholders approves the Transaction but BJC is unable to obtain ample financing to enter into the Transaction, BJC is exposing to high litigation risks resulting from an inability to perform its duty according to the Sale and Purchase Agreement.
Therefore, The IFA viewed that the acquisition of the purchase the total charter capital of METRO Vietnam under the new conditions is inappropriate and may incur significant risks to the Company’s financial status. The IFA would like to recommend the Shareholders to disapprove the Transaction.