Becamex IDC (BCM) has just issued 3-month bonds and has requested to withdraw collateral.

Becamex IDC (BCM) issued 3-month bonds and requested to withdraw collateral

Becamex IDC (BCM) has just approved the withdrawal of collateral for the bond lot coded BCMH2427001. The withdrawn collateral is the land use rights, house ownership rights and assets attached to the land number CY 3756299, land plot number 245, map sheet 44 in Hoa Phu ward, Thu Dau Mot city, Binh Duong province.

After approving this decision, Becamex IDC will consult with bondholders to implement the withdrawal of collateral in October 2024.

Becamex IDC (BCM) has just issued 3-tier bonds and has requested to withdraw collateral (Photo TL)

The BCMH2427001 bond lot was just issued by Becamex IDC a few months ago, from June 17, 2024. This is a bond lot with an interest rate of 10.5%/year, with a total face value of VND 800 billion. Thus, after just over 3 months of issuance, Becamex IDC has planned to withdraw some of the collateral assets of the BCMH2427001 bond lot.

Becamex IDC's withdrawal of collateral occurred in the context of business results showing clear signs of decline. In addition, debt is also increasing, exceeding equity at the end of the second quarter of 2024.

Pressure to pay interest, BCM only completed 22% of the year's target

Becamex IDC is famous as a key enterprise of Binh Duong province, currently implementing two key projects: Bau Bang Industrial Park (scale of 1,000 hectares) and Cay Truong Industrial Park (scale of 700 hectares).

Regarding business activities, in the first half of the year, Becamex IDC recorded revenue of VND 1,973.5 billion, down 9.7% over the same period. Revenue decreased but BCM had to bear additional pressure from interest expenses.

Specifically, interest expenses increased by 17% in the first half of 2024, accounting for VND538 billion. As a result, the company's profits were significantly eroded, remaining at only VND513 billion. Compared to the same period, after-tax profits increased more than 10 times.

At first glance, this may seem like a positive result, but in reality, compared to the 2024 business target, Becamex IDC has only completed 22% of the yearly plan.

Bond debt is growing

BCM's high interest expense is related to the unit's capital use activities. At the end of June 2024, BCM recorded a total capital source of VND 55,029 billion. Of which, total short-term and long-term debt accounted for VND 21,274 billion, an increase of 7.9% compared to the beginning of the year.

Of which, short-term debt accounts for VND9,323 billion and long-term debt accounts for VND11,950 billion. Total short-term and long-term debt is currently higher than equity, causing great pressure from interest payments, dragging down the company's profits.

Part of the debt pressure comes from Becamex IDC’s bond issuances. Since the beginning of the year, the company has raised capital five times through bonds with a total value of nearly VND1,800 billion. All five bonds have a maturity of three years.

By the end of the second quarter of 2024, the outstanding bond balance on Becamex IDC's financial statements was about VND 12,200 billion, with bondholders mostly being banks and investment funds.

Regarding Becamex IDC's bond mobilization activities, VNDirect once reported that the pressure on corporate bond maturity will increase in 2026 and 2028. The total outstanding debt of maturing bonds will be VND4,500 billion and VND3,700 billion, respectively.

Notably, recently, Binh Duong Business and Development (Code: TDC), a subsidiary of Becamex IDC, is also facing cash flow difficulties. This unit had to issue 35 million shares to raise money to buy back a part of the bond lot coded TDC.BOND.700.2020. This bond lot was issued by TDC in 2020 to raise money to pay dividends and late dividend interest to the parent company Becamex IDC.

Source: https://www.congluan.vn/no-vay-tang-cao-becamex-idc-bcm-moi-phat-hanh-trai-phieu-3-thang-da-xin-rut-lai-tai-san-dam-bao-post316330.html