Many businesses restructure assets to support cash flow

A series of plans to liquidate assets, sell subsidiaries, and restructure assets are planned by businesses in the coming time. Not only contributing to solving the problem of balancing cash flow, many deals are expected to bring in large profits.

Trung Nam Solar Power Joint Stock Company is preparing to transfer shares. Photo: Duc Thanh.

Cash flow support

Earlier this July, the conference of bondholders of Trung Nam Solar Power Joint Stock Company approved the content related to the transfer of shares of this enterprise.

Accordingly, Trung Nam Renewable Energy Joint Stock Company will transfer all 19.9 million shares of Trung Nam Solar Power Joint Stock Company to Asia Renewable Energy Development Investment Company Limited (ACIT). If the deal is carried out as planned, Trung Nam will no longer be the largest shareholder. Instead, ACIT - the shareholder currently holding 49% of capital of Trung Nam Solar Power Joint Stock Company - will increase its ownership ratio to 58.9%.

However, on the other hand, the above “selling” deal will bring cash flow to Trung Nam Renewable Energy (TREC). With a charter capital of nearly VND9,100 billion, TREC owns many subsidiaries in the fields of wind power and solar power. Of these, Trung Nam Solar Power has a charter capital of VND1,000 billion, owning Trung Nam Thuan Bac Solar Power Plant with more than 700,000 panels (total capacity of 204 MW) that has come into operation.

Not only for businesses facing cash flow difficulties, selling or restructuring assets is also the choice of many businesses to expand their business.

TREC has two bonds maturing at the end of August 2024, with a total issuance value of VND1,000 billion. Although it is required to disclose information under regulations applicable to enterprises issuing individual bonds, the most recent report of this enterprise is from nearly a year ago.

However, information from the general meeting of shareholders of a securities company that owns a large amount of bonds of companies belonging to Trung Nam Group mentioned the risk of cash flow imbalance. According to the leader of this securities company, the group of companies belonging to Trung Nam still has a steady cash flow, especially with power projects that have been put into operation, but need to rearrange debt repayment with lenders, with appropriate schedules and costs.

Faced with the cash flow problem, selling assets is also one of the solutions often used to solve difficulties. Since the end of May, Garmex Saigon - a textile and garment enterprise with nearly 50 years of history - has continuously "advertised" for sale 3 times the land use rights and construction works at the land plot in Ha Lam - Cho Duoc Industrial Cluster (Binh Phuc Commune, Thang Binh District, Quang Nam Province). The starting price for this 2.6 ha of land remains at 156 billion VND.

Garmex Saigon is facing a big problem when it has almost no revenue, the workforce has decreased from nearly 3,800 people at the end of 2021 to only 35 people at the end of 2023. Liquidating and transferring assets such as damaged machinery, equipment, industrial washing machines, dryers, etc. is the only cash flow solution for Garmex Saigon.

On June 18, Hoa Binh Construction Group Joint Stock Company (HBC) also approved the transfer of 100% of its capital contribution in two affiliated companies, including Anh Viet Mechanical and Aluminum Glass Company and Jesco Hoa Binh Engineering Company. HBC invested VND19.56 billion and VND34.84 billion in these two companies, respectively.

Meanwhile, the target of recovering capital from divestment of Vietnam Airlines Corporation - Joint Stock Company is up to thousands of billions of VND. This airline aims to accelerate the divestment progress at Tan Son Nhat Cargo Services Company Limited (TCS), estimated to collect about 1,700 billion VND to supplement income and cash flow. With the 12,000 billion VND liquidity support package from the Government and the warming of the aviation market, Vietnam Airlines leaders expect to be able to balance revenue and expenditure in 2024.

Restructuring, focusing on core business

Not only for businesses facing cash flow difficulties, selling off or restructuring assets has also been the choice of many businesses to expand their business recently. In just about 2 weeks, Construction Development Investment Corporation (DIG) transferred projects to 2 subsidiaries. DIG decided to transfer Cap Saint Jacques Commercial Service Area - Phase I to DIC Hospitality Company Limited (DIC Hospitality). Next, this company transferred part of the Vi Thanh project to another subsidiary, DIC Vision Investment and Development Joint Stock Company (DIC Vision).

The leaders of Vietnam Container Joint Stock Company (Viconship) have recently also finalized a plan to withdraw from the cooperation contract of the Hyatt Place Hai Phong Hotel Project with T&D Group Joint Stock Company. By the end of 2023, Viconship has spent more than 800 billion VND on long-term business cooperation and investment contracts.

On the same day, this enterprise also approved a transfer transaction to increase ownership of Nam Hai Dinh Vu Port to 100%, with an amount of nearly VND 2,179 billion. Along with thousands of billions of VND mobilized from shareholders through the issuance to double the charter capital, Viconship's resources are focused on the warehouse sector, while reducing the burden of interest expenses, which has jumped to VND 170 billion in 2023 from "almost zero" in previous years.

While the above deals are capital restructuring, the decision to divest from a subsidiary of Phat Dat Real Estate Development Corporation (PDR) on June 20 is expected to bring this enterprise a huge profit. This company has approved the policy of transferring all 111.72 million shares (49% of capital) of BIDICI Real Estate Investment Company - the investor of the apartment project, high-rise commercial center, Subdivision No. 9, Nhon Hoi Eco-tourism Urban Area (Binh Dinh).

From a charter capital of VND 360 billion, with Phat Dat contributing 99% of the capital at the time of establishment in 2020, Phat Dat's capital contribution here has increased to VND 1,117.2 billion, but the ownership ratio is currently only 49%. Phat Dat expects to collect up to VND 1,400 billion, corresponding to a transfer price not lower than 130% of the par value.

Not only does it help solve the problem of balancing cash flow, the above deal, if successful, will bring in large profits. Restructuring strongly to have a more stable apparatus is what businesses do to overcome difficult times.

Source: https://baodautu.vn/nhieu-doanh-nghiep-co-cau-lai-tai-san-ho-tro-dong-tien-d219963.html