Publication of Circular

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

21 November 2014

For Immediate Release

Vietnam Infrastructure Limited 

Publication of Circular

1. Introduction

On 9 October 2014, the Board of Vietnam Infrastructure Limited (the "Company") announced that it had recently been considering, in light of the requirement to hold a continuation vote during 2017 and following consultations with a number of Shareholders, proposals to restructure the Company. Subsequently, the Company has today published a circular to Shareholders (the "Circular"), in which it describes the Proposals and provides further details on how the Proposals will be implemented if approved by Shareholders at the EGM.

The Board believes that the Proposals described in the Circular, and summarised below, will allow long-term investors to retain an investment in Vietnam, whilst providing those Shareholders who wish to realise their investment an opportunity for a phased exit.

The Company has therefore today convened an EGM for 15 December 2014 in order to seek Shareholder approval to implement the Proposals regarding a restructuring of the Company, the designation of new share classes, a bonus issue of shares and changes to the investing policy. The Resolutions to be proposed at the EGM will include the adoption of the New Articles to set out the rights attaching to the new share classes.

Accordingly, Resolutions will be put to Shareholders at the EGM to:

· with effect from the Effective Date (i) redesignate the existing authorised share capital of the Company into Private Equity Shares and Listed Portfolio Shares; and (ii) authorise a bonus issue of new Listed Portfolio Shares on a one-for-one basis to existing Shareholders on the Record Date;

· approve the Proposals;

· conditionally upon Admission, adopt a new investing policy in relation to the Private Equity Portfolio;

· adopt a new investing policy in relation to the Listed Portfolio, (i) that shall apply between the date of the passing of the relevant resolution and the date of Admission, and (ii) that shall apply from Admission to the date of the delisting of the Listed Portfolio Shares; and

· with effect from the Effective Date, adopt the New Articles which set out the class rights of the Private Equity Shares and the Listed Portfolio Shares.

The Company and the Investment Manager have entered into the Amended IMA which, conditionally upon Admission, will replace the Current Investment Management Agreement and, in particular, will amend the fees payable to the Investment Manager. Further details of the Amended IMA are set out in paragraph 7 below and in Part 2 of the Circular.

A summary of the New Articles is set out at Part 3 of the Circular.

It is currently anticipated that, subject to the Resolutions being passed, an AIM admission document in relation to the admission of the new class of Listed Portfolio Shares which will be issued as a result of the Proposals will be published during the first quarter of 2015 in connection with the admission of the Listed Portfolio Shares to trading on AIM.

2. Summary of the Proposals

It is proposed that the Company separates the listed and the private equity components of its portfolio into two distinct pools, the Listed Portfolio and the Private Equity Portfolio, which will be represented by two separate share classes. This will be achieved by, (i) redesignating each of the existing issued Ordinary Shares as a Private Equity Share and amending the share rights as set out in the New Articles, and (ii) undertaking a bonus issue of a new class of Listed Portfolio Shares on a one-for-one basis to existing Shareholders on the Record Date. The Ordinary Shares, redesignated as Private Equity Shares, will remain admitted to trading on AIM and the Company intends to seek the admission to trading on AIM of the new Listed Portfolio Shares. Each of the share classes will respectively have certain class rights relating specifically to the Listed Portfolio or the Private Equity Portfolio. Following Admission and the implementation of the reorganisation, each existing Shareholder will hold one Private Equity Share (redesignated from an Ordinary Share) and one new Listed Portfolio Share for each existing Private Equity Share held by Shareholders on the Record Date.

With effect from Admission, the cash funds held in the Company's portfolio will be allocated between the Private Equity Portfolio and Listed Portfolio as follows; an amount of cash funds shall be allocated to the Private Equity Portfolio sufficient to fund the working capital requirements of the Company through to the target exit date of investments in the Private Equity Portfolio being not later than 30 June 2017, and any surplus cash not allocated to the Private Equity Portfolio shall be invested by the Company in subscribing for VVF Units (as further described below). Liabilities of the Company as at Admission shall be allocated by the Board between the Private Equity Portfolio and the Listed Portfolio on such basis as shall be considered fair by the Board having regard to the assets to which such liabilities relate.

The Proposals are subject to regulatory approvals, in Luxembourg and elsewhere, and to the approval of Shareholders at the EGM, convened for 15 December 2014. Shareholders should note that until the Proposals are implemented, the Private Equity Portfolio will be managed in accordance with its current investing policy, except that no new investments will be made (save for follow-on investments into existing investments in the Private Equity Portfolio which have been approved by the Board). In relation to the Listed Portfolio, Shareholders should note that, subject to Resolution 4 being passed at the EGM (and becoming unconditional) the investing policy of the Company in relation to the Listed Portfolio will be amended as summarised in paragraph 4 of this announcement.

The Board has suspended its share buyback programme and the future operation of the programme will be reviewed as part of the implementation of the Proposals.

3. The Listed Portfolio and the Listed Portfolio Shares

Under the Proposals, the Listed Portfolio will be contributed to a new sub-fund of an open-ended investment company (incorporated under the Luxembourg Law of 17 December 2010 on undertakings for collective investment and regulated by the CSSF), provisionally to be called VCG Partners Vietnam Fund ("VVF") in consideration for an issue of VVF Units, which VVF Units will be held by the Company for the benefit of the holders of the Listed Portfolio Shares as set out below. The rights, and net asset value, of the Listed Portfolio Shares will be solely linked to the VVF Units held by the Company. The Company is expected to be the initial investor in VVF. It is proposed that an associate of the Manager will be the investment adviser to VVF.

Application will be made to the CSSF to approve the establishment of VVF. VVF's investment strategy will be to invest primarily in a diversified portfolio of equities and equity related securities of companies that are, (i) listed, traded or dealt in on the Ho Chi Minh Stock Exchange or the Hanoi Stock Exchange; or (ii) carry out a substantial part of their economic activity in Vietnam and are listed, traded or dealt in on stock exchanges worldwide together, with corporate and government bonds, other types of securities and derivatives.

Following Admission, the Company will undertake two tender offers on two Repurchase Days in the 12 months following Admission pursuant to which holders of the Listed Portfolio Shares will be offered the right to tender, for repurchase by the Company, a portion of their Listed Portfolio Shares in consideration for the transfer by the Company to such tendering holders of VVF Units. A circular in relation to each such tender offer will be sent to holders of Listed Portfolio Shares in advance of each of the First and Second Repurchase Days.

The repurchase of Listed Portfolio Shares in consideration for the transfer, by the Company to such tendering holder, of VVF Units on the First and Second Repurchase Days will be at the Exit Discount to the then current net asset value per share of the Listed Portfolio Shares as at the relevant Repurchase Day as set out in the table below.

This Exit Discount will be net asset value accretive for the holders of the Listed Portfolio Shares who do not tender their Listed Portfolio Shares for repurchase in exchange for the transfer by the Company of VVF Units on the relevant Repurchase Day. Excess tender applications will be permitted and accepted to the extent that other holders of Listed Portfolio Shares do not elect to tender their shares for repurchase on each of the First and Second Repurchase Days.

On each Repurchase Day, the Listed Portfolio Shares tendered and accepted for repurchase by the Company will be repurchased at the then current net asset value per Listed Portfolio Shares on such Repurchase Day (as may be adjusted by any Exit Discount applicable).

The aggregate US dollar amount due to a tendering holder of Listed Portfolio Shares shall be known as the "Aggregate Repurchase Amount". The Company shall satisfy the Aggregate Repurchase Amount due by the transfer by the Company to such tendering holder of such number of VVF Units (at the then current net asset value on the relevant Repurchase Day) as most closely equals the Aggregate Repurchase Amount, but in all cases rounded down to three decimal places.

All Listed Portfolio Shares repurchased by the Company on any of the Repurchase Days will be cancelled.

On the date being twelve months after the First Repurchase Day (the "Final Date"), all remaining Listed Portfolio Shares will be compulsorily repurchased by the Company in consideration for the transfer of VVF Units, and no Listed Portfolio Share will remain in issue, at which point the admission of the Listed Portfolio Shares to trading on AIM will be cancelled.

VVF Units received by the Company (and subsequently distributed to holders of the Listed Portfolio Shares) will be redeemable twice a month at their net asset value on the relevant redemption day without any redemption fee being applied by VVF. Further details on VVF will be set out in the new AIM admission document to be published by the Company in relation to Admission.

As at 31 October 2014, the Listed Portfolio was valued at approximately US$112 million (net of cash). Further information relating to the Listed Portfolio is contained in Part 5 of the Circular.

4. Listed Portfolio Investing Policy

In order to prepare the Listed Portfolio for contribution to VVF following Admission, subject to Resolutions 1 and 4 being passed at the EGM, the investing policy of the Company in relation to the Listed Portfolio will be changed in the period up to Admission to the following:

"The Listed Portfolio will initially be able to invest in a wide range of assets, including shares, corporate and government bonds, and other types of securities and derivatives. It will however have a particular focus on investing in listed equities, across all sectors, primarily those issuers that are (i) listed, traded or dealt on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange; or (ii) those issuers that carry out a substantial part of their economic activity in Vietnam and are listed, traded or dealt in on stock exchanges worldwide. The Listed Portfolio will seek by the date of Admission a diversification of its holdings to satisfy the UCITS requirements being a minimum of 16 assets and, by the date of Admission, the Listed Portfolio will seek to achieve a position under which it will invest no more than 10 per cent. of its net asset value in approved securities or money market instruments from a single issuer, provided that the total value of any holdings between 5 per cent. and 10 per cent. does not exceed 40 per cent. of the Listed Portfolio. The Listed Portfolio will not take legal or management control of its underlying investments. It cannot borrow other than on a temporary basis and then up to a maximum of 10 per cent. of the net asset value of the Listed Portfolio. It is anticipated that returns will be by way of capital appreciation."

This new investing policy is required to allow the Investment Manager to exit any investments in the current Listed Portfolio which would not be compliant with relevant UCITS investment requirements and to allow the Listed Portfolio to be broadened to meet the broader Vietnam focused investment policy proposed for VVF and to which the Listed Portfolio will be contributed.

Immediately following Admission, the Listed Portfolio will be contributed to VVF in consideration for an issue of VVF Units, which VVF Units will be held by the Company for the benefit of the holders of the Listed Portfolio Shares. The sole investment attributable to the Listed Portfolio Shares will therefore be the VVF Units. The investment policy of the Listed Portfolio Shares following Admission will be limited to holding VVF Units and will be passive. The investing policy of VVF is expected to be substantially the same as the investing policy of the Listed Portfolio in the period between the EGM and Admission.

The Directors will continue to have overall responsibility for the investment activities and performance of the Listed Portfolio Shares. However, once the Listed Portfolio comprises only the VVF Units the Directors will no longer be able to directly supervise, review or control the activities of the entities in charge of managing the Company's ultimate investments in the Listed Portfolio. Instead, it is proposed that an associate of the Manager will be the investment adviser to VVF and will exclusively manage the underlying portfolio of the VVF Units and will have full control over all investment, management and divestment decisions, subject to the overall control and supervision of, (i) the board of the open-ended investment company of which VVF will be a sub-fund, and (ii) the independent depositary, and will also be subject to compliance with the rules of the CSSF. The individuals in the Investment Manager's team currently responsible for the management of the Listed Portfolio will continue to have day to day investment advisory responsibilities for VVF.

The Company will, however, at all times comply with its investing policy and will, through its monitoring of VVF seek to ensure that VVF will do the same. In the event of a breach of the Company's investing policy, the Investment Manager will inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification will be made to a Regulatory Information Service. If there is a breach of VVF's investing policy and/or restrictions, the VVF investment adviser will take prompt steps to bring VVF back into alignment with VVF's investing policy and restrictions, subject to the overall supervision of the CSSF.

5. Private Equity Portfolio Investing Policy

With effect from Admission, the investing policy of the Company in relation to the Private Equity Portfolio will be changed to the following:

"The Company shall cease making new private equity investments unless additional funds are required for existing investments within the Private Equity Portfolio, with the intention of maximising that particular investment's value and assisting in its eventual realisation for the highest possible value. Any such further investment shall be subject to Board approval.

The Company will seek to realise its private equity investments at the best available value and in a reasonable timeframe with a target exit date of no later than 30 June 2017."

The target exit date of 30 June 2017 is designed to coincide with the Company's scheduled continuation vote in 2017.

6. Overview of the Private Equity Shares

The rights and net asset value of the Private Equity Shares will be solely linked to the Private Equity Portfolio and the Investment Manager will seek to realise the assets in the Private Equity Portfolio in a controlled and orderly manner so as to ensure that maximum value is obtained. The Investment Manager believes that, in light of current market conditions, the realisation of the Private Equity Portfolio should be completed by 30 June 2017.

The exit proceeds from the sale of investments in the Private Equity Portfolio and surplus net cash-flows will be distributed to the holders of the Private Equity Shares on a periodic basis. Holders of Private Equity Shares will be given the option to receive applicable distributions, in cash or invested by the Company in the purchase of such number of VVF Units (at the then current net asset value of a VVF Unit) as equals the relevant distribution (rounded down to three decimal places) and then distributed to such holder of Private Equity Shares.

It is anticipated that holders of Private Equity Shares who do not make an election will be deemed to have elected to receive VVF Units.

As at 30 June 2014, the Private Equity Portfolio was valued at approximately US$108 million. Further information relating to the Private Equity Portfolio is contained in Part 5 of the Circular.

7. Management and Incentive Fees

The Company and the Investment Manager have entered into the Amended IMA which, conditionally upon, and with effect from, Admission, will amend and restate the Current Investment Management Agreement and in particular will amend the fees payable to the Investment Manager.

Under the terms of the Amended IMA, no annual management fee will be charged by the Investment Manager to the Company in respect of either the Listed Portfolio Shares or the Private Equity Shares.

Instead, an associate of the Investment Manager, in its capacity as investment adviser to VVF, will receive an annual management fee payable by VVF equal to 1.5 per cent. of the net asset value of VVF Units. The Board believes this to be in-line with comparable UCITS frontier markets investment funds.

The Investment Manager, in its capacity as investment manager of the Company, will not receive any fees in relation to any VVF Units held by the Company from time to time.

In relation to the Private Equity Portfolio, the Investment Manager will receive a realisation fee and an incentive fee (as summarised below) based on net sale proceeds received by the Company from the assets in the Private Equity Portfolio:

(i) the Investment Manager will receive a fee of 3 per cent. of the Net Sale Proceeds of each asset in the Private Equity Portfolio realised (the "Realisation Fee"). Such Realisation Fee shall be payable by the Company to the Manager on the earlier of, (i) within seven (7) Business Days following the distribution of the relevant Net Sale Proceeds by the Company to the holders of the Private Equity Shares, or (ii) the date being 60 calendar days after the receipt by the Company of the relevant Net Sale Proceeds;

(ii) in order to align the interests of the Investment Manager with those of the holders of the Private Equity Shares, the Investment Manager will also receive an incentive fee (the "Incentive Fee") equal to 10 per cent. of the amount by which the aggregate of the Net Sale Proceeds received by the Company exceeds the Incentive Fee Hurdle Amount. This amount represents 75 per cent. of the book value of the Private Equity Portfolio as at 30 June 2014. Following the date on which the aggregate Net Sale Proceeds received by the Company exceeds the Incentive Fee Hurdle Amount (the "Trigger Date") the Incentive Fee will be payable by the Company to the Investment Manager in respect of the Net Sale Proceeds from the investment in the Private Equity Portfolio that activated the Trigger Date. Following the Trigger Date, when Net Sale Proceeds are received from a Private Equity investment the Incentive Fee payable in relation to such Private Equity investment shall be paid by the Company to the Investment Manager at the same time as any Realisation Fee payable in relation to such Private Equity investment. For the avoidance of doubt, if the aggregate Net Sale Proceeds do not exceed the Incentive Fee Hurdle Amount then no Incentive Fee shall be payable.

This Realisation Fee and Incentive Fee structure is designed to incentivise the Investment Manager to maximise the sale proceeds from the Private Equity Portfolio and to minimise the time taken to realise the assets in the Private Equity Portfolio at attractive valuations.

Entering into the Amended IMA constitutes an AIM Rule 13 related party transaction. The Directors consider, having consulted with Grant Thornton, that the terms of the Amended IMA are fair and reasonable insofar as Shareholders are concerned.

Shareholders should note that no performance fee is due under the Current Investment Management Agreement which will be terminated and replaced by the Amended IMA with effect from Admission.

A more detailed description of the proposed changes to the Current Investment Management Agreement is set out in Part 2 of the Circular.

8. AnOverview of VVF

The Board believes that, when incorporated, VVF will, by virtue of the performance track record of the Listed Portfolio and its overall size, represent an attractive product for investors seeking to invest in a diversified portfolio of primarily Vietnamese listed securities. The individuals in the Investment Manager's team currently responsible for the management of the Listed Portfolio will continue to have day-to-day investment advisory responsibilities for VVF.

The Listed Portfolio has performed strongly in recent years, as illustrated in the following table:

If the split between the Listed Portfolio and Private Equity Portfolio had occurred on 31 October 2014, the Listed Portfolio would have been valued at approximately US$112 million (net of cash).

9. Timetable

Preliminary steps have been taken in Luxembourg to commence the incorporation and authorisation of VVF and the launch of the fund is expected to be concluded during the first quarter of 2015 following receipt of the necessary Luxembourg regulatory approvals. The redesignation of the existing Ordinary Shares as Private Equity Shares, the bonus issue of the new Listed Portfolio Shares, and the adoption of the New Articles will occur on the Effective Date. The implementation of the Amended IMA is also conditional on Admission.

10. Extraordinary General Meeting

The Resolutions will be proposed at the EGM to be held at 4.30 p.m. (London Time) on 15 December 2014. The formal notice convening the EGM is set out in the Circular.

If Shareholders have any queries regarding the completion of the Form of Proxy, they should contact David Dropsey of VinaCapital Investment Management Ltd, by telephone on +84 8 3821 9930 or by e-mail at [email protected]. Shareholders should note that the Investment Manager can only give procedural advice and is not authorised to provide investment advice.

11. Irrevocable undertaking

Ironsides, funds under whose management currently hold interests in approximately in aggregate 82.5 million Ordinary Shares (representing approximately 23.5 per cent. of the issued Ordinary Share capital of the Company), has given the Company an irrevocable undertaking to procure that such funds vote in favour of the Proposals in respect of the Ordinary Shares in which they are interested.

12. Directors' recommendation

The Board unanimously recommends that Shareholders vote in favour of the Resolutions to be passed at the EGM.

Shareholders should note that the implementation of the Proposals is subject to the consent and approval of regulators in a number of jurisdictions. The failure to secure the timely consent of one or more of these approvals may delay or prevent the Proposals proceeding.

Appendix - Definitions

In this announcement, the following words and expressions have the meanings set out opposite them, unless the context requires otherwise:

Enquiries

For further information, please contact:

Vietnam Infrastructure Limited Rupert Carington Tel: +44 (0)20 7845 5950

VinaCapital Group

Tony Hsun Tel: +84 8 3821 9930

Louie Doan Tel: +84 8 3821 9930

Edmond de Rothschild Securities (UK) Limited, Financial AdviserWilliam Marle Tel: +44 (0)20 7845 5950

John Armstrong-Denby Tel: +44 (0)20 7845 5950

Hiroshi Funaki Tel: +44 (0)20 7845 5960[email protected]

Grant Thornton UK LLP, Nominated Adviser Philip Secrett Tel: +44 (0)20 7383 5100

[email protected]

Shareholders should note that the Proposals outlined above are subject to various regulatory approvals, shareholder approval, updating, amendment and change, and as such, there can be no assurance that a restructuring of the Company will proceed in the manner described above or at all.

This announcement does not constitute a listing document, prospectus, offering memorandum, or offer or solicitation to any person in the United States or any other jurisdiction to purchase or sell any investment. No information set out in or referred to in connection with this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase any securities, nor should such information be construed as providing financial, investment or other professional advice. This announcement should not be considered by the recipient as a recommendation relating to the acquisition or disposal of investments. It is recommended that recipients of this announcement seek their own independent legal, tax, financial and other advice. This announcement does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". In some cases, such forward-looking statements can be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Any forward-looking statements are only made as at the date of this announcement, and the Company neither intends nor assumes any obligation to update forward-looking statements set forth in this announcement whether as a result of new information, By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, results of operations, financial condition, liquidity and distributions to shareholders may differ materially from the impression created by any forward-looking statements contained in this announcement.

The opinions expressed are those held by the Company at the date of this announcement and are subject to change. Neither the Company nor any of its affiliates accept any liability or responsibility whatsoever for the accuracy or completeness of, nor make any representation or warranty (express or implied) with respect to, the information contained in these materials or any publicly available information.