Getting closer to 'debt-free' goal
According to an announcement from Hoang Anh Gia Lai Joint Stock Company – HAGL (HoSE: HAG), the enterprise chaired by Mr. Doan Nguyen Duc (Bau Duc) has just paid the principal of bonds twice to the Bank for Investment and Development of Vietnam (BIDV) with a total value of more than 1,000 billion VND in just a few days at the end of 2024.
Thus, up to now, Hoang Anh Gia Lai of Mr. Duc has paid most of the total 6,596 billion VND of bonds with BIDV as the bondholder, expected to mature on December 30, 2026. The remaining amount is only about 766 billion VND.
Hoang Anh Gia Lai is expected to pay off the remaining debt in the second quarter of 2025 and achieve the goal of "freezing all debt" on bonds as Mr. Duc previously announced.
This is a positive signal for Hoang Anh Gia Lai’s HAG shares. A series of company leaders have recently continuously poured money into buying HAG shares, bringing confidence to shareholders of a once-famous mountain town enterprise that also spent a decade in debt.
So where did Mr. Duc get this large amount of money to pay off the huge debt, up to billions of USD in recent years?
Regarding more than VND 1,000 billion for two principal payments of bonds sold to BIDV in the last few days of 2024, sharing with the press, Mr. Doan Nguyen Duc said that it was from Hoang Anh Gia Lai International Agriculture Joint Stock Company (HAGL Agrico - HNG) transferred to HAG to pay BIDV.
Previously, HAGL, HAGL Agrico and BIDV signed a three-party agreement committing to pay this amount in 2024. HAGL Agrico (HNG) was originally a business belonging to the Hoang Anh Gia Lai ecosystem, then transferred and is now part of the Thaco ecosystem of billionaire USD Tran Ba Duong. However, HAG still has shares here. HNG has just been forced to delist due to 3 consecutive years of losses.
At the end of September 2024, HAGL announced a delay in paying more than VND 4,500 billion in principal and interest on bonds due to not having collected enough money from HAGL Agrico's debt and not being able to liquidate some unprofitable assets.
The situation is now more positive as HAGL has received money from HNG to pay off most of its debts.
This is part of the billion-dollar sum that HAGL and Thaco of billionaire Tran Ba Duong agreed upon in August 2018. Accordingly, Thaco and its group of shareholders will own shares of HAGL Agrico. Thaco will pay the money and at the same time commit to arranging to restructure HNG's loans.
Positive signal
It can be seen that in recent years, Hoang Anh Gia Lai Joint Stock Company of Mr. Duc has had less difficulty when it sold its agricultural sector (HAGL Agrico) to Thaco of billionaire Tran Ba Duong, earning a large amount of money to pay off debt; at the same time, receiving capital from LPBank and Thaiholdings groups of Mr. Nguyen Duc Thuy.
HAG has actively cleared debt and benefited from the expanded durian garden and high durian prices.
However, as of the end of the third quarter of 2024, HAGL's total debt is still quite large. Short-term loans are more than VND 4,200 billion, and long-term loans are nearly VND 3,100 billion. Of which, total bonds are more than VND 4,100 billion (of BIDV and BIDV Securities JSC), including long-term bond debt of VND 2,900 billion and short-term debt of more than VND 1,200 billion.
As of June 30, 2024, HAG is late in paying more than VND 4,364 billion in principal and interest on bonds due to insufficient revenue from HAGL Agrico's debt.
According to the announcement, HAGL only owes about 766 billion VND of BIDV bonds after paying off the debt in the last days of 2024.
Previously, HAGL had liquidated a series of assets, such as Hoang Anh Gia Lai Hotel and University of Medicine and Pharmacy Hospital – HAGL. HAGL used this money for restructuring. In addition, HAGL was also exempted from interest payments by Eximbank, thereby helping profits increase dramatically.
At the 2024 Annual General Meeting of Shareholders, Mr. Doan Nguyen Duc said that if Hoang Anh Gia Lai erases accumulated losses, many investment funds will come in.
Up to this point, HAGL has not announced its business results for the fourth quarter of 2024. However, with a profit target of VND 1,320 billion in 2024, HAGL has not been able to eliminate accumulated losses. Mr. Duc expects HAGL to have a profit of VND 2,000 billion/year in the coming years.
In fact, HAGL still faces many difficulties, including using short-term capital to finance long-term assets, negative business cash flow and investment cash flow.
HAG shares are still quite weak. In the session of December 31, HAG increased slightly by 50 VND to 12,050 VND/share. In the session of January 2, this stock increased by nearly 2.1% to 12,300 VND/share.
In 2024, HAG will benefit greatly from the “2 trees, 1 animal” model – growing bananas, durians, and raising pigs to eat bananas. High durian prices throughout the year have helped HAG make good profits. A sharp increase in pig prices at the end of the year will help Bau Duc’s business make more profits.
However, HAG will have to reduce its bank loans in the short term. In addition to the VND788 billion bond debt, as of the end of September 2024, HAG's LPBank loan debt is more than VND1,540 billion. In addition, doing business in the agricultural sector also has many potential risks due to strong price fluctuations, high interest costs, and risks from weather and epidemics.
The late afternoon bet, Mr. Duc reported a big profit: Is there the mark of tycoon Nguyen Duc Thuy? HAGL can reach the trillion-VND profit mark for the third consecutive year after a fairly high profit in the third quarter thanks to the success of "2 trees, 1 animal" - the field Mr. Duc bet on in his late afternoon with the support of LPBank headed by tycoon Nguyen Duc Thuy.
Comment (0)