Berjaya awarded 18-year US$210.6m Vietnam lottery deal

PETALING JAYA: Berjaya Corp Bhd (BCorp) has been given the go-ahead to run Vietnam's nationwide computerised lottery for 18 years, at a cost of about US$210.58 million (RM925 million).
The conglomerate told Bursa Malaysia that it received the investment registration certificate to kick-start the project yesterday, after winning the bid to run the lottery in May 2014.
The certificate was issued by the Hanoi Department of Planning and Investment to BCorp and Vietnam Computerized Lottery One Member Limited Liability Company (Vietlott), after the two entered into a business cooperation contract (BCC) following the win.
"This award is of tremendous significance for the group as it allows us to strengthen our existing business and socio-economic relationship in Vietnam, which dates back to 2005. We have made substantial investments in property development and the hotel and stockbroking industries in Vietnam over the years," BCorp chairman and CEO Datuk Seri Robin Tan Yeong Ching said in a statement yesterday.
As the project delivery partner, he said, the Berjaya group will provide state-of-the art and enhanced secure gaming technology, performance-driven services, and an integrated business environment under the BCC.
"It is indeed a great honour to be selected to work with Vietlott. We will certainly nurture a gaming business model geared up for progressive sustainable growth, given the Berjaya group's 30 years of proven experience in the gaming industry," Tan added.
The estimated US$210.58 million cost of the project will be funded with internally-generated funds and/or borrowings.
BCorp said the project is part of its plans to expand its gaming business overseas. "This will also enable the BCorp group to strengthen and widen its core business network and also explore other businesses with growth potential in Vietnam," it added.
The project will be carried out by Berjaya Gia Thinh Investment Technology Joint Stock Co (Berjaya GTI), a Vietnamese company which is 51% owned by Berjaya Lottery Vietnam Ltd (BLV), a company incorporated in Labuan. BLV is an 80% subsidiary of BCorp while the remaining 20% is held by Berjaya Sports Toto Bhd (BToto).
Berjaya GTI expects to launch its first game, a Lotto Jackpot game, by mid-2016, followed by a Digit game thereafter.
The launch will begin in Ho Chi Minh City and will progressively be rolled out to reach nationwide coverage within the next five years with some 10,000 terminals.
"BCorp believes that the high barriers to entry, its 18-year exclusive contract and low competitive pressure in the lottery business will provide a stable business environment for the project to sustain and achieve growth in Vietnam," it said.
With the large population of about 90 million in Vietnam and gross domestic product that grew by 6.5% in 2015, the interest and demand for lottery gaming in Vietnam is expected to be significant with its vibrant economic environment.
The Berjaya group's other investments in Vietnam include the Sheraton Hanoi Hotel, InterContinental Hanoi Westlake, and Long Beach Resort Phu Quoc. It also holds a significant stake in a stockbroking company, namely SaigonBank Berjaya Securities Joint Stock Company, in Ho Chi Minh City, as well as investments in several property developments in Vietnam.
The Berjaya group operates a global gaming industry via Sports Toto Malaysia Sdn Bhd and Natural Avenue Sdn Bhd in Malaysia, Berjaya Philippines Inc in the Philippines and International Lottery & Totalizator Systems, Inc in the US.