Hoa Binh Construction Group comprehensive restructuring

On June 20, information from Hoa Binh Construction Group (HBC) said that the Board of Directors has approved a resolution to sell 100% of the capital at Matec Construction Machinery Company Limited (a subsidiary, managing and operating all of the group's machinery and equipment) to the investor, ASHITA Company, for VND 1,100 billion. This also means that Hoa Binh has added VND 1,100 billion in capital to its business activities. At the same time, nearly 10,000 square ^meters of land currently used as factories and offices of the company in the central districts of Ho Chi Minh City since 1996 have also been revalued according to the latest international accounting standards, increasing the asset value of Hoa Binh by nearly VND 500 billion.

Mr. Le Van Nam, General Director of Hoa Binh Construction Group, has proposed a comprehensive restructuring plan for Hoa Binh with the determination to help the group overcome challenges and stabilize soon. Accordingly, the group will restructure the management system, strengthen risk management, and conduct it simultaneously with finance. Review and re-evaluate the management system, cut out unnecessary intermediaries that increase time, resources, and costs, in the spirit of streamlining the management apparatus, with each employee taking on multiple tasks... to increase labor productivity. In addition, Hoa Binh will focus heavily on risk management for sustainable development.

Hoa Binh only retains companies that operate effectively. At the same time, it continues to invest in the development of those companies, moving towards the goal of IPO to invite more investors to participate in owning shares, increasing the assets of these companies as well as increasing the assets of the group. Any company that operates ineffectively and is no longer suitable for the group's future development orientation will be divested and possibly dissolved. This strategy not only manages the group's cash flow well but also acts as a catalyst for member companies to be proactive in transparent, professional and reputable financial management. In addition, the financial departments of all the above companies will be transferred to the group's Finance Department to manage finances centrally and manage risks for subsidiaries and member companies.

A project with Hoa Binh Construction Group as the main contractor

Financial restructuring is Hoa Binh's top priority at the moment. That is, issuing individual shares to suppliers and subcontractors to increase charter capital as well as reduce debt repayment pressure, on the other hand, making subcontractors and suppliers strategic shareholders of Hoa Binh. In addition, there is the work of focusing on debt collection, restructuring loans with banks to extend debt and re-grant new credit packages and re-evaluating the company's assets. Valuing assets, mainly machinery and equipment, to record the current value and confirm that the value is much higher than the value recorded in the accounting books. Currently, these machinery and equipment will still be exploited for another 10-15 years.

According to the financial report on December 31, 2022, Hoa Binh's total investment in machinery and equipment is 2,208 billion VND, fully depreciated on the books after 8 years. It is currently revalued at 1,305 billion VND because many machines still have high usage value. Compared to the current depreciated market price, if bought new, it can be 30 - 60% higher.

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