High debt levels, a series of real estate businesses are slow to pay off maturing bonds

Hung Thinh Quy Nhon Entertainment Services JSC is late in paying interest on bond code HQNCH2124005 with an issuance volume of VND 1,600 billion. The planned payment date is June 11, 2024, the total principal and interest to be paid is VND 1,767 billion.

Hung Thinh Quy Nhon said the reason for the delay in bond debt payment was due to unfavorable developments in the financial market and real estate trading market, causing the company to not be able to arrange enough money to pay on time compared to the plan.

According to the plan, the enterprise commits to pay all debts payable according to the plan by May 26, 2025 at the latest.

Hung Thinh Quy Nhon's 2023 financial statements recorded that as of December 31, 2023, the company's payable debt was VND 28,811 billion, an increase of 27% compared to the previous year. Outstanding bonds were VND 8,468 billion, an increase of 5% compared to VND 8,047 billion in 2022.

Similarly, Hung Thinh Land JSC is late in paying bond code H79CH2124017 with an issuance volume of 600 billion VND, the planned payment date is June 11, 2024, the total principal and interest to be paid is 628 billion VND.

The reason for Hung Thinh Land's late bond payment is similar to Hung Thinh Quy Nhon. However, the company did not announce its expected plan to pay this debt.

By the end of 2023, Hung Thinh Land's payable debt was VND 52,774 billion, down 4% year-on-year. Outstanding bonds were VND 18,330 billion, down 5.9% year-on-year.

KN Cam Ranh Company Limited is also late in paying the bond code HNCCH2126001 with the total principal and interest payable of 36 billion VND. The planned payment date is May 31, 2024. The company said it has arranged the payment source, but the cash flow is slow so it cannot pay on time.

KN Cam Ranh's financial statements recorded that, by the end of 2023, the company's payable debt was VND 23,926 billion, an increase of 15% over the previous year. Outstanding bonds were VND 1,407 billion, a decrease of 28% over the same period last year.

An electricity company, Truong Thinh Energy Investment JSC, is also late in paying bond code TTEH2124001. The company is late in paying interest of VND 13.6 billion, the planned payment date is April 19, 2023, however, Truong Thinh Energy has only finished paying this interest amount on June 7, 2024.

The bondholder of this bond lot is Bong Sen Fund Management JSC. Truong Thinh Energy said that the reason for the late payment has been specifically notified to the bondholder, and on June 7, 2024, Bong Sen Fund Management JSC received full interest.

Truong Thinh Energy's financial statements recorded that as of December 31, 2023, the company's liabilities were at VND927 billion, down 8.6% compared to the figure of VND1,014 last year. Outstanding bonds were at VND247 billion, down slightly compared to VND250 billion in 2022.

Previously, a series of real estate businesses such as Hung Thinh Quy Nhon, Novaland, Phuong Dong Real Estate... were also late in paying principal and interest on bonds.

Assessing the outstanding bond balance and the debt repayment capacity of enterprises, Dr. Nguyen Tri Hieu - Economic expert commented that the value of bonds due this year is up to more than 200,000 billion VND, a very large number, the debt repayment capacity of issuers is low when the market situation and enterprises in general are still very difficult.

Especially for real estate businesses, when the market has not yet recovered, real estate businesses have weak cash flow, high debt ratios and limited sources of money to repay debt, which may pose potential risks in terms of solvency.

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