Hoang Anh Gia Lai (HAG) continues to mobilize an additional 1,300 billion to pay off debt

Hoang Anh Gia Lai plans to issue shares to raise an additional VND1,300 billion

On August 10, 2023, Hoang Anh Gia Lai finalized the list of shareholders to collect written opinions. Notable among the contents submitted to shareholders for consultation is the issue of private offering of shares to supplement the company's mobilized capital.

According to this plan, HAG plans to issue 130 million individual shares at a price of VND10,000/share. The target audience will be professional securities investors. The implementation time will be immediately after the State Securities Commission approves the issuance plan.

With the above issuance plan, HAG is expected to collect 1,300 billion VND. Of which, the company will use 323 billion VND to pay the principal and interest of the HAG2012,300 bond lot issued by the company from June 18, 2012.

Hoang Anh Gia Lai mobilizes an additional 1,300 billion to pay debt image 1 — Hoang Anh Gia Lai (HAG) continues to mobilize 1,300 billion VND to pay debt (Photo TL)

VND277 billion will be used to restructure loans at Tien Phong Commercial Joint Stock Bank. This is a loan from Lo Pang Livestock Joint Stock Company, a subsidiary of HAG.

In addition, the company will use VND700 billion of this capital to supplement working capital and restructure the debt of Hung Thang Loi Gia Lai Company Limited, which is also a subsidiary of Hoang Anh Gia Lai.

Will this IPO fail again?

Previously, on January 17, 2023, Hoang Anh Gia Lai also registered to issue 161.9 million shares privately and was approved by the State Securities Commission. The shares were offered at VND10,500/share.

The initial amount of money collected is expected to be nearly 1,700 billion VND and will be used by HAG to contribute capital to 2 subsidiaries in the form of loans. At the same time, the company will also use part of the capital to pay off the debt of maturing bonds.

Contrary to initial expectations, HAG shares could not return to the par value of VND10,000/share for many months. Therefore, offering new shares at a price of up to VND10,500/share became impossible. The above issuance plan officially failed on April 17, 2023.

Currently, in the trading session on August 23, 2023, HAG shares are priced at VND 8,800/share, quite far from the par value of VND 10,000/share. If the above price range continues to be maintained in the last months of the year, HAG's issuance plan may not be successful. The company will have to find other ways to turn around capital instead of issuing shares as it is now.

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