After the 'royal war', HBC restructures its personnel and finances

Notable among these decisions is that HBC Chairman Le Viet Hai directed the approval of the purchase of 75% of the capital contribution of Thanh Ngan Real Estate Company Limited to achieve 100% ownership of the 127 An Duong Vuong project (District 6, Ho Chi Minh City). At the same time, HBC will issue 47 million HBC shares at a price of VND12,000/share (1.5 times higher than the price on the stock exchange on the date of the resolution). Thus, the total amount spent on this project is VND564 billion, equivalent to the amount collected from the issuance of 47 million HBC shares.

The project has a total area of ^{​​15,394.7m2} , has been granted a certificate of land use rights, of which the land area for high-rise commercial housing and services is ^6,279.6m2 and the area for education is ^6,567.5m2 , the total amount paid to the state budget is 218 billion VND. According to a survey of market prices at the frontage locations around An Duong Vuong Street, the transaction price is over 100 million VND/ ^m2 .

A project of Hoa Binh Construction Group as the construction contractor in Thu Thiem

According to Mr. Le Viet Hai, the project is very potential and will bring in large revenue and profits for HBC. The two new strategic shareholders investing in HBC will hold the same number of shares as Mr. Le Viet Hai is holding in HBC. The two shareholders, Pham Quang Hang and Mai Huu Thung, have also agreed to buy 47 million shares at a price 50% higher after having thoroughly researched HBC's difficult financial situation and clearly understood the company's promising foreign market development strategy. With high financial capacity and strategic vision, these two new shareholders will be two potential strategic partners of HBC.

In addition, HBC also approved the implementation of the request and credit transaction with Vietnam Maritime Commercial Joint Stock Bank. The maximum short-term credit limit is 2,000 billion VND. Of which, the maximum loan limit is 1,000 billion VND, the maximum guarantee limit is 1,000 billion VND. Purpose: supplementing working capital, guaranteeing for business activities, maximum term is 12 months. Approving the acquisition of all shares of Mr. Le Viet Hai at Pax International Company according to the actual contributed capital (138 billion VND). Approving the sale of all contributed capital of Hoa Binh Innovation Center LLC is 167 billion VND. Of which, the part spent on the project is 127 billion VND, with a profit of 40 billion VND. Through the agreement to transfer land use rights of Mr. Le Viet Hai and Ms. Bui Ngoc Mai for 3 land plots with a total area of ^{​​7,218.6m2} on Phan Van Hon Street (District 12, Ho Chi Minh City), with a price of 120 billion VND.

All transactions on Hoa Binh will not use cash but only issue shares and recover the advances for the group's previous business purposes. The recovery of these advances will help the group have more assets to improve its financial capacity.

According to Chairman of the Board of Directors Le Viet Hai, with the above strategic decisions, Hoa Binh will soon stabilize its business situation, overcome difficulties and challenges and will definitely regain its inherent position in the near future.

In addition, according to Mr. Le Viet Hai, out of a total of 21 lawsuits on late payment, 10 lawsuits have been decided by the court. Hoa Binh won all of the cases that were tried. Of which, the principal debt recorded in the accounting books is 829 billion VND, the total amount according to the judgment that the defendant must pay to Hoa Binh is up to 1,223 billion VND including late payment interest and other costs, which is 47.5% higher. Currently, the total amount of debt recovered is 593 billion VND, the remaining amount to be collected from these 10 won lawsuits is 630 billion VND. Mr. Hai also added: In the coming time, the real estate market will recover, so the debts will gradually be handled and he is confident that the recovery rate will not be less than 100% and that the final amount collected will increase by no less than 15% of the overdue principal debt. In HBC's business history, there has never been a debt in the financial report that needed to be submitted to the Board of Directors for deletion due to inability to collect debt.

On the other hand, applying international accounting standards, in the coming time, Hoa Binh will re-evaluate its assets because the data recorded in the accounting books is too outdated. For example, the house at 235 Vo Thi Sau - the old headquarters of Hoa Binh - recorded in the books for only 5.6 billion VND in 2000, now cannot be less than 100 billion VND. Similarly, the house at 233 Vo Thi Sau, land plot 1C Ton That Thuyet (District 4, Ho Chi Minh City). Regarding the remaining value of machinery and equipment, it can be affirmed that it is much higher than the value recorded in the accounting books.

According to the financial report of December 31, 2022, Hoa Binh's total investment in machinery and equipment to date is 2,208 billion VND, with depreciation of 1,305 billion VND, the remaining value is only 903 billion VND. Thus, the remaining value is only equivalent to 40% of the original price. In fact, the scaffolding system is entirely made of galvanized iron, so it is not rusted or damaged much. Cranes, hoists, concrete pumps, etc. are all in good working condition. Due to inflation, the current purchase price is always higher than the purchase price of this asset at original price.

Thus, in the coming time, HBC will adjust its equity after issuing capital increase and revaluation of assets. This adjustment to increase equity will help Hoa Binh ensure credit limit, significantly improve financial capacity to overcome the current cash flow difficulties and will help pay off all debts to suppliers and subcontractors.

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