YKVN and Shin & Kim have advised on Phat Dat Real Estate Development Corporation’s (PDR) acquisition of a 35% stake in South Korea’s Lotte Properties HCMC for around VND7.66 trillion (USD291 million).
The acquisition formed part of PDR’s investment in the development of Lotte Eco Smart City Thu Thiem, a large-scale mixed-use urban project in the Thu Thiem New Urban Area in Ho Chi Minh City, YKVN said.
PDR said that if Lotte Properties HCMC, a direct subsidiary of Lotte Group, raised its charter capital to VND12 trillion, it intended to inject an additional VND2.7 trillion to preserve its 35% ownership stake.
YKVN advised PDR on all aspects of the acquisition, including structuring, due diligence, documentation and completion. Managing partner Truong Nhat Quang and partner Vu Mai Tram led the team, who had the support of senior associate Ha Nguyen Nhat Minh and associate Le Pham Viet Han.
“Our regulatory and compliance advice included the capital-transfer requirements under the Investment Law and the Law on Enterprises; the corresponding amendments to the target company’s investment registration certificate, enterprise registration certificate and other project documents; and the land use regime applicable to the Thu Thiem New Urban area under the Land Law,” Vu told Asia Business Law Journal.
“We advised on structuring the capital contribution and transfer of the equity interest in a manner consistent with Vietnamese law, and on the related conditions precedent and licensing matters required to complete the transaction.”
Vu said there were several challenges to address, including the cross-border nature of the deal.
“The main challenge was reconciling those commercial objectives with the Land Law, in particular the rules governing capital-contributing partners in residential projects and ensuring that the accounting, governance and exit mechanics were both commercially robust and enforceable under Vietnamese law,” she said.
“Co-ordinating a cross-border transaction involving Korean-affiliated counterparties across multiple execution documents added a further layer of complexity, which the deal team managed to a successful signing.”
Shin & Kim advised Lotte Group throughout the transaction, providing support on regulatory reviews, leading negotiations with the Vietnamese government, and preparing and negotiating the agreements between Lotte Group and external investors.
Managing partner of the Vietnam branch Yeongmin Gil was part of the team, alongside partner Ji-Hwan Park, and foreign attorneys Phan Tung Anh Tuan and Dinh Hoang Minh Ngan.
“Because the Thu Thiem project’s original approvals restricted investment exclusively to Lotte Group affiliates, adding new investors and adjusting Lotte’s shareholding became a primary legal hurdle. Shin & Kim resolved this by leveraging newly amended regulations at that time to construct a favourable legal argument, allowing Lotte to successfully negotiate with regulatory authorities to permit the external investment,” Gil told ABLJ.
He said the partnership between PDR and Lotte Group could shape future cross-border co-operation in the real estate sector.
“The partnership between these leading South Korean and Vietnamese enterprises is anticipated to synergise and serve as a benchmark for cross-border co-operation in the real estate development sector. Furthermore, by securing external investment, Lotte Group has successfully raised new capital, ensuring the necessary liquidity to advance the project,” Gil said.
The Lotte Eco Smart City Thu Thiem development is projected to involve total investment of around VND60 trillion, covering a mix of residential, commercial, office, hospitality and public space elements.
