Businesses beg for delay in bond repayment

By Khanh An, Huong Dung
Wed, February 15, 2023 | 8:58 am GMT+7

A series of businesses have announced their inability to repay bond debts and proposed postponement or rescheduling amid a severe lack of capital.

2022 profit data showed a clear weakening in firms’ business activities. In addition, tightened credit and unfavorable developments on stock and bond markets have caused many enterprises to request a delay in repayment of maturing bonds.

Duc Long Gia Lai Group JSC (DLG) has submitted a written request for a delay in debt repayment of bonds of more than VND181 billion ($7.67 million) issued on December 30, 2017 and maturing on December 30, 2022. The batch includes 134 bonds with par value of VND1 billion ($42,370) and an interest rate of 10% per year.

According to the document, DLG has to pay more than VND117 billion in principal and more than VND64 billion in interest. The company said it is negotiating to reach an agreement with bondholders to extend the principal and interest repayment deadline in accordance with the law. It also attributed the slow repayment to its difficult production and business situation, high interest rates and tightened credit.

Many businesses are begging for bond repayment postpontment due to extremely poor cash flow. Photo by The Investor/Trong Hieu.

Many businesses are begging for bond repayment postpontment due to extremely poor cash flow. Photo by The Investor/Trong Hieu.

In January 2023, Hung Thinh Incons JSC announced the late repayment of principal value and interest on bonds that matured on December 31, 2022. This package has an issuance value of VND300 billion ($12.7 million) and the company still owes investors VND210 billion in principal.

Hung Thinh Incons "begged" investors to pay half of the principal in early March 2023 and the other half at the end of that month as it is facing difficulties in cash flow.

Last week, An Giang Import-Export Company (Angimex) held a meeting with bondholders to ask for their opinions on a plan to deal with two bond packages issued on November 9, 2021 and March 14, 2022, with a total value of VND650 billion ($27.54 million).

Angimex revealed that force majeure events relating to personnel and tight monetary policy have caused a lot of difficulties for the company. It also vowed that it would work to find capital sources to pay the principal value and interest on the two bond packages. In late 2022, Angimex also failed to pay interest for holders of these bonds.

Other businesses begging for bond repayment postponment include Casablanca JSC in the southern province of Ba Ria-Vung Tau and Vina2 Investment and Construction JSC (VC2).

Bond maturity pressure

According to the Vietnam Bond Market Association (VBMA), about VND289,819 billion ($12.28 billion) of bonds will mature in 2023. The figure in the first month of the year was about VND17,500 billion ($741.45 million), of which the real estate sector accounted for VND10,500 billion or 60% and the construction industry VND5,900 billion or 34%.

VBMA's latest data also showed that in January, there had been no corporate bond issuance.

According to Vietcombank Securities (VCBS), the size of the corporate bond market in 2023 will continue to shrink as the volume of maturing bonds is large, while new issuances are significantly limited by Decree 65 on private placement of corporate bonds. In addition to high issuance costs, the amount of redeemable bonds will also further downsize the market.

VCBS estimated that corporate bonds maturing in 2023 will be valued at about VND250,000 billion ($10.59 billion), a significant decrease from the third quarter of 2022 thanks to issuers’ proactive bond redemption.

Notably, the redemption value of the banking and real estate industries in the fourth quarter of 2022 reached VND35 trillion ($1.48 billion) and VND24 trillion ($1.02 billion), respectively. Active bond redemption helps businesses and issuers stay more proactive in bond repayment. This move also shows significant efforts to arrange capital, relieving pressure from bond maturity in the near future.

"The bond maturity pressure will be great in the next three years and 2023 is still the period to accelerate restructuring activities, rearrange collateral, and implement complete information disclosure in accordance with Decree 65," VCBS said.

Comments (0)
  • Read More
Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnamese housing developers are offering several incentives including deferred principal payments and interest support to stimulate demand and boost liquidity as the year nears its end.

Real Estate - Tue, November 19, 2024 | 2:29 pm GMT+7

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia-based EQ Resources Limited has acquired its fellow firm Tungsten Metals Group (TMG), which owns and operates the largest ferrotungsten (FeW) factory outside China.

Companies - Tue, November 19, 2024 | 11:00 am GMT+7

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities JSC (TCBS) has become the largest securities company in Vietnam by charter capital after finishing a rights offering last week.

Finance - Tue, November 19, 2024 | 9:11 am GMT+7

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam's airports operator ACV expects to earn $145 million from non-aviation services this year, accounting for around 18.83% of its total revenue, which is modest compared to other countries, said deputy general director Nguyen Duc Hung.

Companies - Tue, November 19, 2024 | 7:45 am GMT+7

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

A seminar themed “Removing legal bottlenecks for infrastructure and property investment” will be organized by The Investor in Hanoi on Tuesday.

Economy - Tue, November 19, 2024 | 7:00 am GMT+7

Indonesia promises Asia-Pacific investors more incentives

Indonesia promises Asia-Pacific investors more incentives

Indonesian President Prabowo Subianto recently told the press that he will create more incentives and expand special economic zones (SEZs) so as to lure investors from Asia-Pacific.

Southeast Asia - Mon, November 18, 2024 | 11:01 pm GMT+7

Indonesia, Brazil enhance aviation cooperation

Indonesia, Brazil enhance aviation cooperation

Indonesia's state-owned aircraft manufacturer, Dirgantara Indonesia (DI), and Brazilian aerospace company Embraer have signed a memorandum of understanding (MoU) to expand collaboration in the commercial aviation sector.

Southeast Asia - Mon, November 18, 2024 | 11:00 pm GMT+7

Indonesia eyes to become member of BRICS

Indonesia eyes to become member of BRICS

Indonesian President Prabowo Subianto has shown his country’s desire to become a member of the BRICS - the alliance of major emerging economies initiated by Brazil, Russia, India, China, and South Africa.

Southeast Asia - Mon, November 18, 2024 | 10:57 pm GMT+7

Former Party chief, chairman of Vinh Phuc province face disciplinary action

Former Party chief, chairman of Vinh Phuc province face disciplinary action

Vietnam’s Central Inspection Committee has proposed disciplining Pham Van Vong, former Party chief of Vinh Phuc, and Phung Quang Hung, former chairman of the northern province, for violations related to Phuc Son Group.

Politics - Mon, November 18, 2024 | 9:17 pm GMT+7

Shaping a waterway into a key shipping channel: Viconship gets dredging nod

Shaping a waterway into a key shipping channel: Viconship gets dredging nod

A major dredging project will allow safer ship navigation and increased cargo transportation capacity on the Hai Phong shipping channel, thereby enhancing competitiveness of Vinconship’s port system, says the company.

Companies - Mon, November 18, 2024 | 7:08 pm GMT+7

Former assistant to State President appointed general director of state-owned financial firm HFIC

Former assistant to State President appointed general director of state-owned financial firm HFIC

Truong Tuan Anh, an official at the State President Office and former assistant to a state president, has been appointed general director of Ho Chi Minh City Finance and Investment Stated-owned Company (HFIC).

Companies - Mon, November 18, 2024 | 5:35 pm GMT+7

MBBank’s takeover of weak OceanBank to have limited impact on its credit profile: Fitch

MBBank’s takeover of weak OceanBank to have limited impact on its credit profile: Fitch

Military Commercial Joint Stock Bank's (MBBank) takeover of Ocean Commercial Bank Limited (OceanBank) will have limited financial impact on the former’s credit profile, Fitch Ratings said Monday.

Banking - Mon, November 18, 2024 | 5:06 pm GMT+7

Win-win philosophy indispensable for sustainable growth: Bamboo Capital founder

Win-win philosophy indispensable for sustainable growth: Bamboo Capital founder

A win-win cooperation strategy is not just desirable, but a necessary condition for sustainable development, says Nguyen Ho Nam, founder of Vietnam’s private conglomerate Bamboo Capital Group.

Bamboo Capital - Mon, November 18, 2024 | 4:46 pm GMT+7

Vietnam central bank resumes selling gold after 1-month hiatus

Vietnam central bank resumes selling gold after 1-month hiatus

The State Bank of Vietnam (SBV), the country's central bank, on Monday announced that it will reactivate the sale of SJC-branded gold bars to meet market demand.

Banking - Mon, November 18, 2024 | 4:02 pm GMT+7

Vietnam 2nd biggest market of Thai giant Central Retail in Jan-Sept

Vietnam 2nd biggest market of Thai giant Central Retail in Jan-Sept

Thailand’s leading retailer Central Retail earned a revenue of THB37.99 billion ($1.09 billion) in Vietnam in the first nine months of this year, up 0.9% year-on-year.

Companies - Mon, November 18, 2024 | 4:00 pm GMT+7

Singapore firm to invest in $19.7 mln garment factory in central Vietnam

Singapore firm to invest in $19.7 mln garment factory in central Vietnam

Singaporean-based HGQ ASIA Pte., Ltd will pour nearly VND500 billion ($19.7 million) into building a garment factory in the south-central province of Binh Dinh.

Industries - Mon, November 18, 2024 | 2:23 pm GMT+7