Construction giant Hoa Binh plans to issue 47 million shares

Leading Vietnamese construction contractor Hoa Binh (HBC) plans to issue 47 million HBC shares at the price of VND12,000 ($0.5) per unit to own 100% of the 127 An Duong Vuong residential project in District 6, Ho Chi Minh City.

The issue price is 1.5 times higher than the price on the stock exchange on the date the company approved the plan, and the total amount spent on this project is VND564 billion ($24.06 million), equivalent to the issuance proceeds.

The 127 An Duong Vuong residential project, covering nearly 15,400 square meters, has been granted a land use right certificate, in which the land area for high-rise commercial housing and services is nearly 6,300 m2 and the area for education is nearly 6,570 m2. The total amount paid to the state budget is VND218 billion ($9.3 million).

Previously, Hoa Binh Construction Group had approved the purchase of a 75% stake at Thanh Ngan Real Estate Co., Ltd. to wholly own the 127 An Duong Vuong project.

According to chairman Le Viet Hai, this project would bring great revenue and profit to the group. Two new strategic shareholders investing in Hoa Binh will hold the same total number of shares as Hai, namely Pham Quang Hang and Mai Huu Thung.

At Hoa Binh's recent meetings, Hai added that out of a total of 21 lawsuits on late payment, there were 10 cases with court rulings. Hoa Binh won all the cases that have been tried.

The total amount of debt recovered reached VND593 billion ($25.3 million), while the remaining amount to be collected from these 10 won lawsuits equals VND630 billion ($26.9 million).

"In the coming time, the real estate market will recover, so the debts will be gradually resolved. I am sure that the recovery rate will not be less than 100% and the final amount will increase by no less than 15% of the overdue principal.

"In the business history of Hoa Binh, there has never been a debt in the financial statements that needs to seek board of directors approval to be written off due to the inability to collect debts," Hai added.

In May 17, the Ho Chi Minh Stock Exchange had announced the transfer of HBC shares of Hoa Binh from controlled to restricted trading starting May 23, due to late submission of its 2022 audited financial statement by more than 45 days. Accordingly, HBC shares will not be traded in the morning session from next Tuesday (May 23).

Hoa Binh reported a net loss of more than VND440 billion ($18.75 million) in the first three months of 2023, marking its second quarter of loss in a row. The corporation recorded a revenue of nearly VND1.2 trillion ($51.14 million) in the period, down nearly 60% year-on-year, according to its financial statement.

It posted a gross loss of more than VND200 billion ($8.52 million) from main activities, as compared to a gross profit of nearly VND200 billion in Q1/2022.

By the end of Q1, Hoa Binh's total assets had reached nearly VND15.7 trillion ($669 million), down over VND1.2 trillion ($51.14 million) from the beginning of the year.

Its accumulated loss by the end of Q1/2023 was more than VND1.1 trillion ($46.88 million), equivalent to more than 40% of its charter capital (VND2.74 trillion).