Construction major Coteccons raises $54 mln in bond sale to restructure liabilities

Vietnam's leading construction firm Coteccons has raised VND1.4 trillion ($54 million) through a three-year bond issuance to restructure outstanding liabilities, as the company posts sharply improving earnings and a record project backlog mounting to VND62.5 trillion ($2.42 billion).

Coteccons said it successfully issued 14 million bonds to 14 domestic and foreign investors. The bonds are non-convertible, unsecured, carry no warrants, and offer a fixed coupon of 9% per year.

Domestic individual investors accounted for 83.65% of the issuance value, while four foreign investors took the remaining 16.35%. SSI Securities acted as adviser to the transaction.

After issuance costs, Coteccons netted over VND1.38 trillion ($53.44 million), which the company said will be used entirely to settle operating liabilities, including payables to partners, subsidiaries, and employees.

Earnings rebound, receivables improve

Coteccons is Vietnam’s largest construction company by revenue. In the 2024-2025 fiscal year, the company posted revenue of over VND24.88 trillion ($961.6 million), up 18.2% from the previous year, while net profit rose 47% to VND456 billion ($17.62 million).

Momentum continued into the first half of fiscal 2025-2026, with revenue surging 50% year-on-year to VND17.46 trillion ($674.68 million) and net profit reaching VND522 billion ($20.17 million) - 2.6 times higher than a year earlier and exceeding profit for the entire previous fiscal year.

The company said newly awarded contracts in the second quarter of fiscal 2025-2026 were worth about VND18 trillion (VND695.58 million), lifting its carried-forward backlog to a record VND62.5 trillion ($2.42 billion). Repeat customers accounted for 94% of revenue in the first half, underscoring client stability.

Beyond core operations, Coteccons booked a one-off gain of VND184 billion ($7.11 milllion), largely from VND188.5 billion in revenue related to the termination of a business cooperation contract.

As of end-2025, accounts receivable stood at over VND16.35 trillion ($631.98 million), equivalent to about 47% of total assets. However, bad debts declined by VND39 billion from June 30, 2025 to VND1.52 trillion ($58.74 million), while provisions fell nearly VND10 billion to nearly VND1.24 trillion ($47.72 million).

The company maintained a strong liquidity position, with cash and deposits of nearly VND6.3 trillion ($243.45 million), representing 18.2% of total assets.

On the liabilities side, short-term borrowings rose to over VND5.06 trillion ($195.6 million) from over VND2.98 trillion, while long-term debt increased to VND180 billion ($6.96 million) from negligible levels previously.

Total borrowings reached over VND5.24 trillion ($202.57 million), equivalent to a debt-to-equity ratio of about 56%, which the company said remains manageable for a large-scale contractor.

Coteccons shares have rebounded from around VND72,600 to VND85,000 earlier this year before easing back to about VND80,100 ($3.1) amid broader market weakness.

Positive outlook

Brokerages have expressed optimism about Coteccons’s outlook. Broker Agriseco said the company’s sizeable backlog should secure workloads through 2028.

Vietnam’s residential property market is expected to continue recovering in 2026, supported by measures to resolve legal bottlenecks, administrative boundary mergers that could drive long-term growth, and increased public investment in infrastructure.

Industrial construction is also expected to improve as new FDI into industrial parks is projected to rise following U.S. moves to lower reciprocal tariffs, boosting land leasing demand.

In addition, policies that have been and are expected to be issued are expected to minimize the time and procedures for businesses investing in industrial parks, as well as promote long-term supply and support increased demand for factory construction.

Coteccons said domestic clients accounted for about 65% of revenue in the first half of fiscal 2025-2026, while foreign-invested enterprises contributed 35%. Residential construction made up 74% of the company’s total backlog value.