On the afternoon of June 27, Hoa Binh Construction Group Corporation (HBC) held its 2023 Annual General Meeting of Shareholders (AGM) in the context that the company has just experienced many difficulties, such as losses, debt, and internal conflicts.
Right before the shareholders’ meeting, the last member of the “opposition faction” to Mr. Le Viet Hai, Mr. Duong Van Hung, resigned from his position as an independent member of the Board of Directors at HBC on June 26. Previously, Mr. Nguyen Cong Phu, Mr. Le Quoc Duy and Mr. Albert Antoine had all resigned.
A special point at the General Meeting of Shareholders of Hoa Binh Construction was the presence of "tycoons" in the construction industry, including "rival", Mr. Bolat Duisenov - Chairman of the Board of Directors of Coteccons Construction Company also attended.
Coteccons recently surpassed Hoa Binh Construction and regained the top spot in the 2023 construction contractor rankings.
In addition, the General Meeting of Shareholders of Hoa Binh Construction also had the representative of Central Cons Construction Company - Chairman of the Board of Directors Tran Quang Tuan; Representative of An Phong Construction Joint Stock Company - General Director Nguyen Khac Dong.
The HBC shareholders' meeting also had representatives of partners in the Hoa Lu consortium participating in the bidding package for the national key project Long Thanh airport worth 35,000 billion VND.
In a message to shareholders, Chairman of the Board of Directors Le Viet Hai explained: “In the midst of the storm, Hoa Binh took a step back to renew itself with a comprehensive restructuring strategy with the determination to help Hoa Binh overcome challenges and gradually stabilize to continue developing and restore its inherent position.”
According to Mr. Hai, Hoa Binh Construction will re-evaluate the company's assets, mainly machinery and equipment, to record their current value. Mr. Hai also affirmed that the current value of assets is much higher than the value recorded in the accounting books.
Currently, these machines and equipment will still be exploited for many more years. According to the financial report on March 31, 2023, Hoa Binh's total investment in machinery and equipment is 2,189 billion VND, of which 1,344 billion VND has been depreciated on the books. The remaining value is 845 billion VND. The depreciated value of 1,344 billion VND includes many machines and equipment that still have high usage value but are recorded as having a value of 0 in the books because they have been used for more than 8 years. Meanwhile, compared to the current price if buying new those equipment, due to depreciation, the price will be 30-60% higher.
At the end of the meeting, the General Meeting of Shareholders of Hoa Binh Construction also approved the plan to issue 274 million private shares at a minimum price of VND12,000/share this year, corresponding to the minimum capital that can be mobilized of VND3,288 billion.
HBC will use this money to supplement business capital, swap debts with partners (subcontractors, suppliers, manufacturers) with a total value of VND 1,050 billion, pay off loans and invest in project development.
As of June 23, 2023, 89 suppliers and subcontractors have agreed to offset debt with shares worth VND 650 billion.
In 2023, Hoa Binh Construction Group set a business plan target of VND 12,500 billion in revenue, of which revenue recorded from backlog is VND 7,500 billion, new contract revenue is VND 2,000 billion, revenue from exporting construction materials is VND 1,300 billion,... Profit after tax is VND 125 billion.
The congress also approved the resignation of Mr. Nguyen Cong Phu, Mr. Le Quoc Duy, Mr. David Martin Ruiz, Mr. Albert Antoine and Mr. Duong Van Hung from the positions of members of the Board of Directors. At the same time, Mr. Le Van Nam, Ms. Vu Thi Hoa and Ms. Nguyen Thi Luot were elected by the congress to join the Board of Directors for the 2022-2024 term.
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