HNG shares just increased 50% in value, HAGL immediately sold to pay off debt
In just a few short weeks, HNG shares of Hoang Anh Gia Lai International Agriculture Joint Stock Company - HAGL Agrico have increased in price by more than 50%. Recorded in the trading session on January 8, 2023, HNG shares are being traded at VND 5,200/share, down slightly after reaching a peak of VND 5,700/share on January 4, 2023.
Notably, during this period of rapid growth, major shareholder Hoang Anh Gia Lai Joint Stock Company (Max HAG) registered to sell 13.3 million HNG shares to pay off bonds for a large bank in Vietnam. The transaction was conducted by negotiation and order matching on the stock exchange from January 9, 2023.
HAG divests capital from HNG to get money to pay debt (Photo TL)
If the transaction is successful, HAGL will reduce its ownership in HNG to only 91.4 million, equivalent to 8.24% of charter capital.
HAGL’s sale of shares in HNG comes as the company is constantly having to sell its assets to pay off its debts. Previously, HAGL also announced the sale of hotels and international hospitals in its ecosystem to pay off its debts, despite the company still posting profits of hundreds of billions of dong each quarter.
Earning hundreds of billions of dong each quarter, HAGL still has to sell assets to pay off debt
In the past 2 years, HAG has never known a loss, the dream business results of this unit recorded profits of up to hundreds of billions of VND each quarter. However, a strange paradox is that the company still has to continuously sell assets to get money to pay off due debts. The last loss reported by HAG was from the first quarter of 2021 with a loss after tax of about 68.8 billion VND.
In a recent move, the plan to issue 130 million individual shares of HAG was also implemented with the purpose of raising capital to pay off debt. After issuing shares, HAG's price continuously had shocking price increases and reached the price range of 13,000 VND/share after a short time.
Regarding business results, in the most recent third quarter, Hoang Anh Gia Lai achieved revenue of VND1,889.4 billion, up 31.1% over the same period. Profit after tax reached VND324.6 billion, up 12.2%. Part of the sudden increase in profit was recorded from the liquidation of fixed assets, contributing VND144.1 billion to the company's third quarter business results.
Entering October 2023, Hoang Anh Gia Lai's revenue also recorded 711 billion VND, an increase of 52.3% over the same period. Of which, the fruit tree segment contributed 57.7%, equivalent to 410 billion VND. The livestock segment contributed 27.8%, equivalent to 198 billion VND. The supporting industry was 103 billion VND. In October, the company continued not to announce profits as it did in previous monthly reports.
However, in contrast to the bright business results, HAG is continuously having to sell assets to pay off debts. Recently, the company approved the transfer of shares at BAPI Hoang Anh Gia Lai JSC. Accordingly, HAGL will sell all 2.75 million BAPIHAGL shares, with a par value of VND10,000/share. If the transaction is successful, BAPI Hoang Anh Gia Lai will no longer be an affiliated company of HAGL.
Previously, HAGL also had to transfer 9.9 million shares that the unit owns at the University of Medicine and Pharmacy Hospital - Hoang Anh Gia Lai, corresponding to the ownership ratio of 99% of the charter capital at the University of Medicine and Pharmacy Hospital Joint Stock Company - Hoang Anh Gia Lai. According to the previous announcement, this amount will be used by the company to pay the principal and interest of the maturing bonds that were issued since 2016.
In addition, Hoang Anh Gia Lai also had to resell Hoang Anh Gia Lai Hotel located at No. 1 Phu Dong, Phu Dong Ward, Pleiku City, Gia Lai Province and earned about 180 billion VND. This amount was also used to pay off debt.
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