IP developer KBC to raise $236 mln to restructure debts, augment capital

Kinhbac City Development Holding Corporation (KBC), a leading industrial real estate developer in Vietnam, will offer 250 million shares to 11 investors for more than $6,000 trillion ($236.4 million) to restructure its debts.

A resolution passed by its board of directors headed by chairman Dang Thanh Tam says the privately placed shares will be restricted from trading for one year.

SGI Capital will be the largest buyer with 48.97 million shares, followed by VPBank Securities with 20 million, and Prudential Vietnam Life Insurance Company with 13 million.

Individual investors – Nguyen Hong Nhung, Nguyen Hoang Thanh Thanh, Pham Khanh Duy, and Trinh Bao Duy Tan – are expected to purchase between 35 million and 39 million shares each.

Four foreign investors to whom the shares will be offered are: DC Developing Markets Strategies Public Limited Company; Samsung Vietnam Securities Master Investment Trust; Vietnam Enterprise Investments Limited; and Amersham Industries Limited.

The expected share price is 80% of the average closing price of 30 trading sessions preceding the date on which the State Securities Commission (SSC) issues an approval or confirms the full registration documents for the private placement, but not lower than VND16,200 ($.64) per share.

The offering is expected to take place from Q1-Q3 2025. The proceeds will be used to restructure debts and supplement working capital for the company’s business operations.

The KBC ticker traded at around VND29,350 ($1.16) per share last Friday, reflecting a 17% recovery from September, but still significantly lower than the VND35,000 it reached in March.

KBC estimates that with the offering price of around VND25,000 per share, the firm will raise approximately VND6.25 trillion ($246.3 million), of which VND6.09 trillion will be used for debt restructuring and VND160 billion ($6.3 million) will be added to its working capital.

If the amount raised is less than VND6.25 trillion, the board of directors will consider flexible use of bank loans, retained earnings and depreciation from the year to cover any shortfall in the company’s total capital requirement.

According to its consolidated financial statement for Q3/2024, KBC had liabilities of VND21.73 trillion ($856.35 million), an increase of VND8.51 trillion from the beginning of the year.

Major debts included more than VND2.5 trillion in short-term payables, VND3.04 trillion in “other” short-term payables, VND5.74 trillion in long-term payables and VND5.54 trillion in long-term loans.

The company reported a 58% year-on-year drop in revenue to VND1.99 trillion ($78.42 million) and more than an 80% decline in after-tax profit to VND397 billion ($15.65 million) in Q3.