Hanoi developer takes over delayed mega project in downtown HCMC

Vietnamese property major Bitexco Group has transferred its entire stake in Saigon Glory Co., Ltd, developer of a six-star complex project in Ho Chi Minh City’s Ben Thanh quadrilateral, to Eastern Hanoi Real Estate Co., Ltd.

Named The Spirit of Saigon, the mega project is a hotel, apartment, commercial space and office building complex at No. 1 Pham Ngu Lao street, Nguyen Thai Binh ward, District 1.

The project was initially assigned to Bitexco as the investor in 2013, but it was delayed for several years. In 2018, Bitexco established Saigon Glory, a wholly-owned subsidiary with an initial charter capital of VND7 trillion ($284.6 million), to carry out the project.

The mega project had been assigned to two other developers earlier. It was named One Central HCM and Pearl Pham Ngu Lao with Masterise Homes and Viva Land as developers, respectively.

The value of the latest transfer has not been revealed.

Eastern Hanoi Real Estate Co., Ltd, the new owner of the project, was established on May 23, 2019, with a charter capital of VND517 billion ($21 million). Its initial shareholders were Eastern Real Estate Investment and Trading LLC (50%) and Pham Quoc Nhat (50%). Nhat, 58, also served as its legal representative and CEO.

A month later, the company increased its capital to VND1.2 trillion ($48.8 million), which has been maintained until now.

In January this year, a third company with a similar name ("Eastern" at the beginning of the names) - Eastern Real Investment LLC – was set up with headquarters at the Ngo Quang Huy Building in Thao Dien ward, Thu Duc city.

It had a charter capital of VND1.52 trillion ($61.8 million), with Vu Thi Phuong Thu holding 99.999% and Ho Thu the remaining 0.001%.

In August, the company increased its capital to VND2.27 trillion ($92.3 million), with Vu Thi Phuong Thu remaining the largest shareholder at 99.999%. Phuong Thu now serves as the legal representative and CEO in place of Ho Thu.

As of April 2024, Eastern Real Investment LLC held 58.7% of the Eastern Hanoi Real Estate Company Ltd.’s charter capital and Tran Thi Minh Hieu held the remaining 41.3%. Hieu, 45, has replaced Nhat as the legal representative and CEO.

Hieu also serves as CEO of Nhat Minh Real Estate Investment and Development JSC, which was established in April 2024 with a charter capital of VND20 billion ($813,174), in which which Eastern Hanoi Real Estate holds 98%, while individuals Duong Dinh Phu and Tran Thi Hue hold 1% each.

New owner's burden

In 2020, Saigon Glory gained prominence by issuing bonds totaling VND10 trillion ($406.6 million), half of them maturing in June 2023 and the other half in August 2025.

Recent announcements show that VND5 trillion worth of Saigon Glory (SGL) bonds have had repayment deadlines extended to June and July 2025, and the remaining half to November 2026.

Since the beginning of the year, Bitexco has redeemed VND1.14 trillion worth of the bonds, leaving approximately VND8.86 trillion ($360.24 million) to be paid. The parties involved have committed that the transfer of Saigon Glory's equity will not affect or change the rights of bondholders.

Bitexco has pledged to fulfill its obligations to pay the principal and interest on 10 SGL bond packages from September 1, 2024 to June 12, 2025, along with interest due on bonds set to mature on June 18, 2025. The same day, Eastern Hanoi Real Estate Co. Ltd. will pay the principal due.

To date, the developer of the Ben Thanh quadrilateral project has not released its financial statements for 2023 or the first half of 2024. By the end of 2022, its equity had reached VND6.85 trillion ($278.5 million), with bond debt totaling VND10 trillion ($406.6 million) and total liabilities nearly four times the equity at around VND27.3 trillion ($1.11 billion).

The company reported a profit of VND290 billion ($11.8 million) in 2021 but incurred a loss of VND152 billion in 2022.