UPDATE 2-Vietnam's Masan expects to unveil exit pact with Korea's SK soon

(Adds details, context, earnings)

By Phuong Nguyen

HANOI, Oct 30 (Reuters) - Vietnamese conglomerate Masan expects to announce a pact soon with South Korean partner SK for the latter's exit from their partnership, the chief executive said on Monday, adding that the process could take years.

Shares of the leader in Vietnam's food processing industry fell last Friday to 57,800 dong ($2.36) each, their lowest since late 2020, on rumours of a possible $500-million cash outflow from SK's investment in Masan, brokers and traders have said.

Masan's Chief Executive Danny Le denied the rumours, telling analysts and investors that Masan would announce the agreement in the next couple of days.

"SK continues to maintain a very strategic partnership with Masan," he said at an event on third-quarter earnings.

"We are working on a multi-year solution ... and we understand cash is king right now."

SK, which paid about $470 million in 2018 to acquire the largest foreign stake in Masan, now has investments of up to $1.5 billion in the Vietnamese conglomerate, Le said.

There was no immediate comment from the South Korean firm on Le's remarks.

In an earlier statement Masan said SK Group was a long-term group partner, with both working together to maximise shareholder value.

The group, whose products range from food to bottled drinks, household items and mining products, had net profit of $55 million in the nine-month period, down 66% from the year-earlier period, it said in an earnings statement on Monday.

"Masan has fully repaid its debt obligations maturing in 2023," its deputy chief executive Michael Nguyen said, adding that bond obligations maturing in 2024 were significantly lower than its cash holdings.

Vietnam recently tightened regulations on privately placed bonds after property developers and other industries accumulated excessive debt, but has delayed implementation of some of the new rules amid turmoil in the corporate bond market.

"There are no hedging structures or stock borrow of Masan's shares as part of the equity investment that would result in the shares needing to be sold in the open market at the date of the issuance," Nguyen added.

At the event, Masan executives said the group was also in "pro-active" talks with U.S.-based private equity firm Bain Capital to increase an investment of $200 million revealed this month. ($1=24,565.0000 dong) (Reporting by Phuong Nguyen; Editing by Clarence Fernandez)