Hung Thinh, Novaland, Trung Nam and a series of big companies are slow to pay principal and interest on bonds

100 businesses delay bond payments

According to the Corporate Bond Market Update Report recently released by MB Securities Company (MBS), as of November 21, about 100 enterprises have announced delays or postponements in principal and interest payments on bonds.

This securities company estimates that by November 2023, the total value of corporate bonds (TPDN) with delayed payment obligations will be about 192,000 billion VND, accounting for nearly 19% of the outstanding TPDN debt of the entire market. Of which, the real estate industry group continues to account for the largest proportion - about 70% of the value of delayed payments.

Meanwhile, statistics on the bond page of the Hanoi Stock Exchange (HNX) show that a series of big names in the market such as Novaland Group, Hung Thinh Group, Trung Nam Group... have continuously announced information about late payment of principal and interest on bonds in recent times.

From February 2023 to November 2023, Nova Real Estate Investment Group Corporation (Novaland, HOSE: NVL) had 69 unusual information published on HNX, of which more than 20 were unusual announcements of late payment of principal and interest on bonds.

In fact, the number of businesses related to Novaland Group that are late in paying interest and principal on bonds will be greater, as a series of businesses related to this group have not yet arranged funds to pay bondholders when due.

Similar to Novaland, Hung Thinh Corporation and businesses in its ecosystem such as Hung Thinh Land and Hung Thinh Quy Nhon also have a series of unusual information announcements about late payment of principal and interest on bonds.

Hung Thinh Quy Nhon (a member of Hung Thinh Group) said that due to unfavorable developments in the financial market and real estate trading market, the issuing organization has not been able to arrange funds in time to make payments on time compared to the plan.

As a business that has actively participated in raising capital in the stock market in recent years, Trung Nam Group is also facing difficulties in paying principal and interest on bonds when the market is facing difficulties.

Accordingly, at the end of October 2023, Trung Nam Dak Lak 1 Wind Power Joint Stock Company (a member of Trung Nam Group) announced unusual information about the delay in paying bond interest. This company said that as of October 30, 2023, the electricity sales for September 2023 had not been paid as expected, so the company could only make timely payments for a portion of the bond interest.

Carefully evaluate the ability to pay corporate bonds

Regarding the bond market, recently, Prime Minister Pham Minh Chinh signed Official Dispatch 1177/CD-TTg dated November 23, 2023 on continuing to resolutely implement solutions to increase access to credit capital, promote the development of the corporate bond market, and real estate effectively, safely, healthily, and sustainably.

According to the dispatch, although the corporate bond and real estate markets have improved, they have not met expectations; credit growth is low, the economy's ability to absorb capital continues to be difficult, and bad debt tends to increase.

The Prime Minister requested the Ministry of Finance to preside over and coordinate with relevant agencies to urgently review and carefully and specifically evaluate the payment capacity of organizations issuing corporate bonds, especially bonds due for payment in late 2023 and 2024.

Proactively develop scenarios, assess impacts and have specific and effective plans and measures to handle them according to authority, contributing to ensuring safety and security of the financial and monetary markets; not allowing passivity, surprise and negativity to affect the rapid and sustainable development of the economy.

At the same time, closely monitor and accurately assess the ability and payment plan of the issuing enterprise, especially enterprises that are still facing difficulties and may have risks in debt repayment ability.

Require businesses to prioritize resources to fully perform obligations according to regulations, ensuring the legitimate rights and interests of investors and related entities.

There are practical and effective solutions to consolidate, enhance and restore investor confidence, promote the safe, transparent, healthy and sustainable development of the corporate bond market.

Source