Galaxy Cinema theater owner has a debt ratio of 759 times equity

Galaxy Entertainment and Education Joint Stock Company (abbreviated as Galaxy EE) has just announced its financial situation for the first half of 2024 in accordance with regulations related to the offering and trading of individual corporate bonds.

Accordingly, Galaxy EE continued to record a loss after tax, with after-tax profit in the first half of 2024 being negative VND 16.6 billion. Compared to the same period in 2023, the company had a loss after tax of VND 288.6 billion.

In recent years, Galaxy EE has continuously maintained negative after-tax profits and a sharp decline in equity. Although not losing as much as in 2022, Galaxy EE still lost more than VND 473 billion in 2023 (in 2022, it lost nearly VND 623 billion). In 2021, the company lost nearly VND 371 billion. Together with the losses in 2022 and 2023, Galaxy EE's accumulated losses in the last 3 years have amounted to nearly VND 1.5 trillion. Equity also began to decline sharply from 2022, from VND 847 billion (in 2021) to more than VND 260 billion (in 2022).

In the first 6 months of 2024, Galaxy EE recorded equity at VND 1.8 billion, while in the same period last year, the company's equity was at VND 45.5 billion, a decrease of 96%.

With a sharp decrease in equity, the company's debt/equity ratio increased from 28.36 times in the first half of 2023 to 759.25 times in the first half of 2024, corresponding to liabilities of VND 1,366.6 billion.

Outstanding bonds/equity increased from 4.39 billion VND in the first half of 2023 to 110.65 billion VND in the first half of 2024, equivalent to outstanding bonds at more than 199 billion VND.

According to information published on the Hanoi Stock Exchange (HNX), the company currently owns 8 bond lots, issued in turn each month from May 2021 to December 2021. These bond lots have a term of 4 years (due in 2025), value of VND 25 billion/lot and interest rate of 12%/year. The total issuance value is VND 200 billion.

In fact, these bonds have a term of 2 years, but on May 18, 2023, Galaxy EE reached an agreement to extend the term for another 2 years with the bondholders, while raising the applicable interest rate from 10% to 12%.

The collateral value has also been increased. Previously, the collateral value of the bonds was determined to be “always at least equal to 100% of the total face value of the outstanding bonds and all accrued interest.” After the change, the ratio was increased to 120%.

In addition, the terms of early bond repurchase at the request of bondholders have also changed. Before the change, bondholders had the right to request Galaxy EE to repurchase up to 50% of the bonds held before maturity at the 12th month from the date of issuance. Under the new plan, the term is increased to 33 months. In addition, 36 months from the date of issuance, bondholders have the right to request the issuer to repurchase 100% of the bonds they are holding. The repurchase price is calculated by the bond value at par value plus unpaid bond interest.

Galaxy EE was established on May 17, 2013 with the main business activities being the production of movies, videos and television programs. The company owns a number of famous brands such as the online movie viewing platform Galaxy Play, the film production unit Galaxy Studio, and the Galaxy Cinema theater complex.

Source: https://laodong.vn/kinh-doanh/chu-rap-galaxy-cinema-co-he-so-no-gap-759-lan-von-chu-so-huu-1387917.ldo