IFLR 1000
The Guide to the World's Leading Financial Law Firms

"Mergers and acquisition (M&A) deals in Vietnam have been on a sharp rise in the last few years. Deals involving M&A have proved an effective investment channel for enterprises in Vietnam both foreign and domestic", says a highly regarded partner.

The past year has seen a number of strategic acquisitions of stakes in Vietnamese companies in the sectors of financial services, natural resources, energy, telecommunications, food and beverage and real estate as well as the establishment of joint ventures. This is as a result of Vietnam's "commitments under the WTO where we need to provide that, subject to certain conditions, foreign companies and individuals are now allowed to fully acquire a local unlisted company".

An increasing amount of M&A and outbound investment by Vietnamese companies has led to increasing activities within the financial sector with the need for acquisition financing.

The State Bank of Vietnam requires that at least D3 trillion ($145 million) in capital is held by Vietnamese banks, which has led to a need for expansion by domestic banks as they look to new activities and markets to raise capital. "Big capital puts extreme pressure on the banks because more capital requires bigger profit and dividends for investors," says one observer.

Furthermore, the banking and finance sector has anticipated the big difficulties they will meet in 2011 with exchange rate fluctuations, high interest rates and policies on credit restriction. All of these will place further pressure on the capital costs and the capital demand of banks.

"With growing bank credit we are seeing increased risks to the system", says a partner. It is believed Vietnam's government is likely to lower the target for bank credit growth to almost 20% in 2011.

"Although the target is feasible, it is still too high with bank credit approaching GDP levels of 110% towards the end of last year", comments a partner. Bank credit already grew about 25% in 2010, exceeding the government's target of 23%. In addition, Vietnam had several years of high credit growth, especially in 2007 and 2009, including loans to large state-owned borrowers.

Borrowing costs in Vietnam have also risen sharply. "Vietnamese dong (D) lending rates have increased to 18% for a 12-month loan, from 12% one year ago", says a leading law firm partner. "In contrast, the US dollar lending rates are notably lower at 6%", the partner adds. The wide differential has prompted many businesses to borrow in dollars instead of the dong. Those who generate revenues predominantly in dong, increase their exposure to foreign exchange risks and high inflation in Vietnam in the past few years has also weakened confidence in the currency.

Adding to the system's credit vulnerabilities, inflation in the country rose to above 12% year on year in January 2011 from just 7.1% in 2009. This was down in part to the government's loosening monetary policy in the second half of 2010 to support economic growth, and rising global commodity prices were responsible for the soaring inflation.

"If inflation continues to rise, the costs for businesses domestically or internationally will hinder borrowers' debt servicing ability. At the same time it's a catch-22 situation if the government is overzealous in tackling inflation it could have a destabilising effect which undermines the confidence in the banking system", comments a special foreign counsel.

Australian firm Allens Arthur Robinson has a "deep knowledge of regulations and local corporate laws", says a rival law firm partner. Another partner praises the team for being "very good in project finance" and is seen as "the go-to firm" on the Vietnamese side of a transaction.

One of the strengths in the team is the practice's depth. Bill Magennis, "a very good operator", handles the full range of corporate exercises, and is "one of the pillars in banking, finance and mergers and acquisition transactions", comments a client.

Nigel Russell "is a very prolific funds management and project finance practitioner", according to another client, while Andrew Hilton is praised for his "sound advice and diligent client service". The past year he led the team in advising TPG on its $35 million subscription to convertible bonds issued by Masan Group.

Another notable highlight for the team was advising Commonwealth Bank of Australia in relation to its appointment by Vietnam International Bank (VIB) as a strategic foreign investor and its acquisition of a 20% stake in VIB.

Audier & Partners is "excellent, very pro-active, and invaluable in negotiating the often convoluted regulatory environment in Vietnam," says a client. The team has very "good knowledge in Vietnam related matters", comments another.

A notable highlight is advising Goldman Sachs in the subscription of US dollar denominated convertible bonds in a prominent listed infrastructure company.

The team also advised Accor, a leading international company in the hotel industry sector for the development of a network of hotels throughout Vietnam under various global brands. This transaction required assisting on various corporate, construction and land issues under the complicated Vietnam land laws.

Baker McKenzie's "extensive knowledge and comprehensive understanding of the Vietnamese law is what separates them from their competitors", says a client. "With sometimes not too clear laws in Vietnam, they give us very commercially useful advice and a good understanding of the issues, even though these are new to both them and us."

As one of the few international firms practicing in Vietnam, the team's international presence and strong ties with major investment banks, state-owned banks and insurance companies allowed them to play a key advisory role to Xangbo Management (Singapore) on a trade finance transaction, under the GSM 102 Programme.

A key highlight last year saw the firm act for the borrower on a $400 million loan facility for the development and construction of the Cai Mep terminal in Hanoi.

The team boasts a good combination of special international counsels and locally licensed practitioners. Frederick Burke is described as a "highly regarded practitioner" by one client, "[he] understands clients' expectations and is always able to deliver the desired outcome". Oanh Hoang Kim Nguyen is also well regarded in the market: "A hard working lawyer with solid knowledge of securities and foreign investment laws," says one peer.

Another notable highlight for the team was advising Nissan in a joint venture to set up Nissan Vietnam, which will allow the company to import and distribute their own products.

Frasers Law Company is "innovative in that they think of different options and different solutions", says a client. "Quite a diversified team", says another client who adds that the team is "not bound by the black letter of the law... it integrates active advice with commercial sense and risk assessments".

Leading the team is partner Mark Fraser who is "very experienced, very well strategically and the knowledge of Vietnam is really what he brings to the table", says a client.

Justin Gisz "is very proactive at responding to client needs and has good broad knowledge of all investment topics". Another client comments: "the firm is familiar with local rules and regulations, the level of expertise and the update with the changes in local regulations is very comforting".

The team acted for Nippon Steel Company (NSC), one of the world's largest producers of steel and steel products in regard to the establishment of a $33 million welded steel spiral pipe joint venture in Vietnam.

The project was significant because it involved the formation of a joint venture between NSC and the largest Vietnam state-owned steel enterprise as well as some of the world's largest steel trading houses.

Freshfields Bruckhaus Deringer has "good knowledge of Vietnam laws and regulations", a client says. "With very little innovation possible in a Vietnam context, where clarifications to legal interpretations may vary with individual government officers, they do very well", the same client adds.

"Freshfields' partners and practitioners are able to understand requirements much faster, due to their long experience in handling corporate companies' legal affairs in Vietnam," says another client.

One of the standout practitioners is Tony Foster, who "knows the system inside out and is able to distil that experience into something that very closely resembles wisdom", comments a rival. "Tony is an absolutely outstanding individual and has a high level of integrity [and] incredible amount of knowledge," a client adds, "Tony is an institution here; genuinely the best."

Proving the team is not a one-man band, Bui Thanh Tien is recommended by one peer as "a very senior Vietnamese lawyer in Ho Chi Minh City in terms of knowledge and execution".

The past year saw the team advise Singapore Technologies Telemedia in the acquisition of a strategic interest in Electricity of Vietnam Telecom. This significant transaction is one of the first large state-owned enterprise acquisitions in recent years.

Another notable highlight was advising AES on the sale of a 30% interest in AES-VCM Mong Duong Power to Posco. AES VCM owns the 1200MW Mong Duong 2 Power Project. The firm also advised the sale of a further 19% interest to China Investment Corporation, a state-owned investment agency in China.

"LCT Lawyers is most often associated with real estate, development, and infrastructure projects in Vietnam", says a rival partner. Led by Le Net, "one of Vietnam's leading lawyers in real estate" according to peers, the team has been growing from strength to strength.

The team brokered the first credit-linked note issuance in Vietnam on behalf of Vietcombank, based on $800 million in Vietnamese government-issued international bonds. This is the first credit-linked note issuance in Vietnam regarding government issued international bonds

Another highlight in the past year was advising the People's Committee of Ho Chi Minh City as local counsel on the East-West Highway project, Thu Thiem Tunnel and Water Improvement Project. These projects are valued at nearly $1 billion and marked one of the biggest Japanese ODA (Overseas Development Assistance) funded projects in Vietnam.

Mayer Brown had "another strong year and is becoming a major player in Vietnam", comments a rival. "I'd recommend Mayer Brown JSM. I don't believe there is a better banking team after working with them," says one client.

Leading the team is Dao Nguyen, a highly regarded practitioner who is "technically very strong and extremely knowledgeable and very methodical in her approach", according to one peer.

The team acted as Vietnamese legal adviser to Vietinbank in connection with a $182 million equity and a $125 million subordinated debt investment by the International Finance Corporation (IFC) and its Capitalisation Fund in Vietinbank.

Partner Hoang Anh Nguyen, "one of the most underrated practitioners in banking and capital markets", according to one partner, led the team in assisting one of Vietnam's largest private sector companies, Hoang Anh Gia Lai, to become the first Vietnamese company to list overseas, with an offering of $57 million in global depositary receipts (GDR) on the LSE.

Another highlight for the team was advising the Vietnam Posts and Telecommunication Group as the borrower on a $540 million syndicated loan agreement with BNP Paribas and Natixis as arrangers and other credit institutions.

With Dao Nguyen "possessing expertise in various field", the team advised on the restructuring, merger and acquisition of assets, liquidation and dissolution of the two subsidiaries of Yokohama in Vietnam.

Russin & Vecchi one of the oldest practices in the country is "producing quality work" with "good technical knowledge and business acumen", says a client of the firm's.

Rising star Nguyen Huu Minh Nhut has been praised by both client and peers as being "smart, responsive with good drafting skills and having a business sense".

The past year saw the team advise on the sale of shares in Hanoi Liquor JSC (Halico) to strategic investor and global consumer goods company Diageo. The deal, valued $52 million, also involved a complex closing structure with different interlinked conditions, transactions and performance securities included.

Another highlight was advising Nomura International, UBS, Barclays Capital, and Morgan Stanley with derivatives trading in form of an Isda master agreement and global market repurchase agreement (GRMA).

With no solid legal framework for trading derivatives in Vietnam, various issues needed to be addressed, such as, permissible types of derivative products, local counterparties' authorization to trade derivatives, application of netting and setting-off provisions under the Isda master agreement and GRMA.

Tilleke & Gibbins is "excellent in terms of knowledge and expertise, with the ability to provide viable options when necessary," says a client. The banking and finance team has developed a solid reputation and has both clients and peers commenting that "they are all very competent and seasoned professionals". "I think they offer innovative solutions," says a peer.

The team assisted Standard Chartered Bank (Vietnam) to re-compile the bank's complete set of home loan documentation. The documentation set includes the facility agreements, mortgage agreements and triparty agreements between the bank, borrowers and real estate developers.

Continuing its high quality advisory with "creative and practical solutions, innovative on legal issues of Vietnam in relation to infrastructure projects in general the firm is climbing up the ranks in the Vietnam market".

Vilaf-Hong Duc is "extensively knowledgeable, has expertise and is innovative in providing advice on legal issues of Vietnam in relation to infrastructure projects", says a client. "The firm in particular has well-established experience in working with international law firms such as Clifford Chance and others in large-scale projects."

Dang Duong Anh is held in high regard by peers and clients alike: "Partner Dang Duong Anh has knowledge and expertise in relation to the international practice in infrastructure projects," says a client who "highly recommends" Dang Duong Anh.

The past year saw the firm advise the Chinese project sponsors in a joint venture with Vietnam National Coal - Mineral Industries Group in the development of Vinh Tan 1 2x600MW Coal Fired Power Plant on a BOT (build-operate-transfer) basis in Vietnam.

The complexity and significance of this project involved a government guarantee and undertaking secured from the beginning. The deal used a similar framework to the Phu My 2.2 and Phu My 3 Power Projects, which has been changed in many respects over the decade.

The firm also advised Kohlberg Kravis Roberts (KKR) in acquiring a $159 million 10% equity stake in Masan Consumer, a subsidiary of Ma San Group and one of Vietnam's largest private sector companies. This deal was Vietnam's largest private equity deal to date and KKR's first investment in Vietnam.

The transaction was filled with complexity in the structure of certain special options, exit rights and exchange rights, which require sophisticated structuring due to Vietnam's regulatory restrictions on corporate governance.

Another notable highlight was advising Citibank as arranger on its $450 million unsecured export credit financing provided to the PetroVietnam Nhon Trach 2 Power Project Company for the purchase of capital equipment from certain exporters. The deal is backed by the Ministry of Finance of Vietnam's guarantee and supported by Euler Hermes Kreditversicherungs-Aktiengesellschaft (Hermes) and Nippon Export and Investment Insurance (NEXI).

Vision & Associates is led by Pham Nghiem Xuan Bac, who "specialises in foreign direct investment and insurance work, amongst many other areas", says a client. It is a multifaceted firm "combining weighty commercial experience with many years of legal knowledge," says another.

The past year saw the team advise a consortium of multi-national banks on a $500 million syndicated loan to a power project in Vietnam.

"In my view, they are top tier lawyers in their respective areas of practice," says a client. This firm once again retains its position in the rankings. "Clearly a top tier law firm and have handled many landmark deals for clients in the market", comments a peer.

The firm not affiliated to any international law firm but is "probably one of the best local firms in Vietnam", according to one peer. "We treat them as our trusted advisors and friends," says a client, and praises Truong Nhat Quang as a "very diligent, professional and sound advisor".

A highlight last year was the firm's advice to the lead managers BNP Paribas, Deutsche Bank and Morgan Stanley for the Rule 144A/Reg S bond issue by the PetroVietnam Group (PVN). This is the first international bond issuance by a Vietnamese corporate with the deal raising a host of complex issues under Vietnamese law including necessary approvals and waivers on securities and foreign debt management.

The team also advised BP on due diligence in regard to the Vietnamese assets sold by the company in the wake of the oil spill in the Gulf of Mexico. These energy assets were sold to TNK-BP, a Russian company in which BP was a joint venture party.

Another notable highlight was advising Vietnam's Ministry of Industry and Trade on all phases of the development of the Nghi Son II 2x600MW BOT (build-operate-transfer) coal-fired power project in central Vietnam. The project is particularly significant because the documents used will become a template for all future BOT coal-fired power projects in Vietnam.