Why did Bitexco choose to sell Saigon Glory?
Bitexco Group LLC has just agreed to transfer 100% of its capital contribution at Saigon Glory LLC to Hanoi Phuong Dong Real Estate LLC.
Saigon Glory is the investor of the 6-star hotel project The Spirit of Saigon (Ben Thanh Quadrangle), in a prime location opposite Ben Thanh Market (District 1, HCMC). The project design includes 2 towers connected by a base and arranged far apart, 46-55 floors high. The total investment capital of the project is 14,400 billion VND (in 2020).
In relation to this project, Saigon Glory has issued VND 10,000 billion in bonds since 2020. The collateral is the project's tower A and Saigon Glory's capital contribution.
Financial issues and the pressure to repay bonds may be one of the issues that made Bitexco choose to sell all of its shares in Saigon Glory.
According to the latest information that the company announced to the Hanoi Stock Exchange (HNX), in 2022, Saigon Glory lost more than 152.3 billion VND, while last year it made a profit of nearly 290.5 billion VND. Owner's equity decreased compared to the same period, to more than 6,847 billion VND. The company also had a debt/equity ratio of 3.99 times. Accordingly, the company has more than 27,300 billion VND in debt.
In 2023 and the first 6 months of this year, the company has not disclosed its financial situation to HNX as required. The company also violated administrative regulations in information disclosure and was fined VND92.5 million in May this year.
In the context of business losses, in October 2022, after the "scandal" about the ability to pay bonds in the financial market related to the arrest of the leader of Van Thinh Phat Group, Saigon Glory committed to buying back all 10,000 billion VND of these bonds before maturity, in 2 phases. In phase 1, the company bought 5,000 billion VND of bonds before maturity no later than June 12, 2023 and in phase 2 no later than June 12, 2024.
However, these commitments were not implemented. Saigon Glory also delayed the payment of bond principal, and the parties involved had to discuss the handling of collateral assets.
The company then successfully extended the payment period of VND10,000 billion of outstanding bonds by 1-2 years, in 2025-2026. The interest rate also decreased to 8%/year, lower than the initial commitment of 11%/year.
In the agreement to sell all Saigon Glory shares to the partner, Bitexco commits to pay the principal and interest of 10 bond lots from September 1, 2024 to June 12, 2025 and the interest of the payment period on June 18, 2025. Meanwhile, Hanoi Phuong Dong Real Estate Company will continue to pay the principal of the payment period on June 18, 2025 and the principal and interest after this period.
Saigon Glory is the investor of the project opposite Ben Thanh market (Photo: Hai Long).
Portrait of the new owner of the super project
After reaching an agreement and implementing the transfer as committed, Hanoi Phuong Dong Real Estate Company Limited will be the new owner of the super project The Spirit of Saigon.
According to business registration information, Phuong Dong Hanoi Real Estate Company was established in May 2019, headquartered on the 10th floor, Pacific Place Building, 83 Ly Thuong Kiet, Hanoi. The main business lines are investment in construction, business of industrial parks, urban areas; real estate business; leasing premises; investment and business of eco-tourism areas.
The company's initial charter capital was over VND517 billion. Of which, Phuong Dong Real Estate Investment and Trading Company Limited held 50% of the capital, and Mr. Pham Quoc Nhat (holding the position of General Director) held 50% of the capital.
One month after its establishment, the company increased its capital to VND1,200 billion, more than double its initial charter capital. At this time, Mr. Nhat's ownership ratio decreased to 41.34% while Phuong Dong Company's increased to more than 58.65%.
In April this year, the company's shareholder structure continued to change. Mr. Nhat transferred his capital to Ms. Tran Thi Minh Hieu and is no longer the General Director. Phuong Dong Real Estate Company also transferred its shares to Eastern Real Investment Company Limited. Currently, Ms. Tran Thi Minh Hieu is the General Director and Legal Representative of Phuong Dong Hanoi Real Estate Company.
Eastern Real Investment Company Limited, which owns 58.65% of the capital of Hanoi Oriental Real Estate Company, was just established earlier this year in Thu Duc City, Ho Chi Minh City. With its main business being real estate, Eastern Real Company has a charter capital of over VND1,522 billion.
The project has been through the hands of Masterise and Viva Land
Land funds in the central area of Ho Chi Minh City are increasingly limited. It is very rare to develop high-rise projects in prime locations, especially like The Spirit of Saigon. The project owns a frontage on 4 streets: Pham Ngu Lao - Calmette - Le Thi Hong Gam - Pho Duc Chinh, in the center of District 1 and near famous landmarks such as the Museum of Fine Arts, Ben Thanh Station, and 23/9 Park.
The architectural highlight of the project lies in the two towers which, according to the investor, Bitexco Group, are shaped like two dragons, holding two pearls in their mouths, representing new vitality and new development.
This project was approved for investment by Bitexco Group in 2013, 11 years ago. At that time, the project was started by contractor Coteccons and expected to be completed in 2017.
But by 2018, the project had just completed the foundation piles and 6 basements and was accepted. According to Bitexco, this was the first project to build 6 basements and there were few projects in the world that built that many basements. Therefore, the project encountered unavoidable, long-term, complicated difficulties, including both objective and subjective reasons, to complete the construction of 6 basements.
The Spirit of Saigon is still unfinished after many years (Photo: Hai Long).
Around 2018-2019, the project had a temporary suspension of construction. During this time, the legal entity on the project certificate was changed from Bitexco Group (parent company) to Saigon Glory Company Limited (a 100% owned subsidiary of Bitexco Group).
Bitexco later also explained that the construction was stopped to restructure from the parent company to the subsidiary, so it takes time for state management agencies, banks, etc. to assess and carry out the processes and procedures according to the law.
At the end of 2019, the project was once again restarted by contractor Coteccons, constructing 10 floors of the project's base. The project is expected to be handed over within 10 months (August 2020).
In early 2020, the Ho Chi Minh City Department of Construction issued a document confirming that 214 apartments in the project were eligible for sale or lease-purchase of future housing. However, Bitexco announced that these apartments had not been put up for sale (March 2020).
The investor also planned to start construction of the tower block from the end of 2020 and strive to complete the project in early 2023, although the deadline is allowed until 2024. However, up to now, the project has stopped construction for many months and there are no signs of restarting.
In early 2021, the Masterise Homes nameplate appeared on the fence surrounding the project site. Along with that, contractor Newtecons also "replaced" Coteccons to build this super project.
However, the project construction did not change significantly when Masterise Homes appeared. Even in early 2022, the name Masterise Homes disappeared from the signboard and the project stopped construction.
Viva Land (in the Van Thinh Phat Group ecosystem) was replaced on the fence as the project developer. At that time, Viva Land introduced this project in the developing list, with the new name Pearl. After Viva Land appeared, the project continued to be constructed.
However, in October 2022, the leaders of Van Thinh Phat Group were arrested and the project was also "frozen". The Viva Land logo outside the fence surrounding the project was completely removed. The project has been exposed to the sun and rain for many months.
Now, with Bitexco's capital conversion agreement, the project is expected to officially change to a new owner, Hanoi Phuong Dong Real Estate Company Limited. This enterprise appeared on the market in 2019, when it received a part of the Tay Mo - Dai Mo - Vinhomes Park new urban area project from Thai Son Construction Investment Joint Stock Company (under Vingroup). After that, the project was developed by Masteri Homes under the name Masteri West Heights.
In the near future, when it changes owners, will the super project The Spirit of Saigon wear a new coat?
Source: https://dantri.com.vn/bat-dong-san/sieu-du-an-doi-dien-cho-ben-thanh-roi-tay-bitexco-doi-chu-co-doi-van-20240924091904036.htm
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