Industrial property developer Becamex cancels $85 mln bond issuance

Vietnamese industrial property developer Becamex, backed by global private equity firm Warburg Pincus, has decided to cancel a plan approved in 2022 to issue private placement bonds worth VND2 trillion ($85.2 million) due to unfavorable market conditions.

The decision will be officially announced at the company's annual general meeting of shareholders (AGM) on June 29.

However, the company, listed on the Ho Chi Minh Stock Exchange (HoSE) as BCM, will issue VND1 trillion ($42.6 million) worth of bonds this June to pay for maturing bonds, under a new plan approved on June 2.

It will be the first bond tranche issued this year by the Binh Duong province-based company. The new bonds will be non-convertible and backed by mortgages. They will mature in 2025. The expected minimum coupon rate for the first four profit calculating times will be 13% per annum, but on a quarterly basis.

Becamex has set a revenue target of VND9.46 trillion ($402.85 million) in 2023, up 19% year-on-year, and after-tax profit of VND2.26 trillion ($96.37 million), up 32%.

This year, Becamex will focus its resources on investing in trade, services, smart manufacturing, and innovation to create new growth drivers in the 2023-2025 period.

Becamex recorded revenue of VND791.4 billion ($33.7 million) in the first quarter, down 44.8% year-on-year, and after-tax profit of VND74.43 billion ($3.17 million), down 81%. The profit performance was equal to only 3.3% of its full-year target.

The company reported after-tax profit of VND1.72 trillion ($73.52 million) last year, of which VND1.15 trillion ($48.83 million) came from its joint ventures and associated companies. The figure was a 15% increase year-on-year and equivalent to 59% of its 2022 target. The corporation earned net revenue of VND6.51 trillion ($277.5 million) in the year, up 6% and fulfilling 67% of the annual target.

Becamex’s joint ventures include BW Industrial - a major industrial and logistics real estate platform in Vietnam, and a partnership with Warburg Pincus. BW Industrial has about $2 billion in gross assets under management, according to the joint venture.

Another joint venture is VSIP Group, a partnership between Becamex and Singapore's leading conglomerate Sembcorp Industries. VSIP is a leading industrial park and township developer in Vietnam.

On the HoSE, the BCM share price was VND79,400 ($3.38) at Friday's close