HCMC Financial Investment Company launched

The Ho Chi Minh City Financial Investment Company (HFIC) officially debuted March 16, tasked with mobilizing capital at home and abroad, and granting loans to the city's development projects.

The State-owned company, with registered capital of VND5 trillion (US$265 million), was established on the basis of restructuring the HCMC Investment Fund for Urban Development (HIFU), under Decision 576 dated February 2, 2010 by the HCMC People’s Committee.

A one-member limited liability company, HFIC operates under the “holding company – subsidiaries” model and is governed by the Law on Enterprise and other relevant laws.  
 
The main aim of HFIC is to mobilize capital from organizations and individuals at home and abroad by issuing urban bonds and work bonds under the authorization of city authorities; and to seek loans from financial and credit institutions.

HFIC will use the mobilized capital to make direct investments in fields prioritized by the city, including technical and social infrastructure projects; development of major industries; public welfare projects; and social and economic development programs; or contribute capital to businesses to set up joint ventures or joint stock companies.

At the same time, the company will provide loans to such projects, and make indirect investments via the capital and stock exchange markets.

HFIC targets mobilizing capital through joint stock companies where the fund holds a stake, HFIC said, adding that it would expand operations to improve efficiency in investment and management of the city’s budget capital.

The company will also provide financial services and investment consultancy to domestic and foreign individuals and organizations, and provide and receive trust investment capital for lending purposes from and to credit organizations.

The company said it would continue mobilizing capital outside the State budget to strengthen investment sources for the city’s development – a field in which its predecessor has gained encouraging achievements in the past 12 years.

HFIC will also take over all interests and obligations of HIFU in its past relations with domestic companies and international organizations.

For example, HIFU received a €30 million credit from the French Development Agency (ADF) in 2006, and a credit line worth US$50 million from the World Bank (WB) in 2007.

Recently, HIFU has negotiated with ADF for another credit line valued at €20 million and has been involved in the $190 million credit allocation that the WB granted to investment funds in Vietnam.  

Experts said the establishment of HFIC marks the success of the "investment fund for urban development" model, initiated by the city and then multiplied across the country.

By Phan Loc, Quoc Huy – Translated by Truc Thinh

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