Why did Ricons file a petition to open bankruptcy proceedings with Coteccons?

Ricons said that there was a lot of false information posted on social networks related to Ricons filing a petition to the court to open bankruptcy proceedings against Coteccons, affecting Ricons' reputation and business operations and increasing unnecessary tension between the parties.

According to Ricons, the filing of a petition to the court to open bankruptcy proceedings against Coteccons is the result of overdue debt "acknowledged by Coteccons" but unpaid for many years.

" Ricons has considered the optimal solution to recover the debt and has proactively sent many documents to Coteccons proposing a solution. During that process, it has also notified and updated Coteccons that Ricons has filed a petition to open bankruptcy proceedings with the desire to resolve the matter before the court accepts the petition, in order to avoid possible adverse consequences. But unfortunately, we have not received a goodwill response from Coteccons ," a representative of Ricons shared.

According to the company, Ricons' request for debt payment and filing for bankruptcy proceedings were carried out in accordance with legal procedures over a long period of time. On July 4, 2023, the court accepted Ricons' request. The company explained that "the above legal action is for no other purpose than to recover the long-overdue debt".

Coteccons' debt is recorded in Ricons' financial statements.

According to the financial report for the second quarter of 2023, Ricons said that Coteccons owes more than VND322 billion. In addition, Gamuda Land JSC owes more than VND647 billion and other customers owe VND2,401 billion.

In the second quarter of 2023, Ricons' net revenue reached more than VND 2,102 billion, down 24% over the same period last year; profit after tax was more than VND 52 billion, up 90% over the same period.

In the first 6 months of the year, Ricons achieved VND3,821 billion in net revenue, down 20%. The company reported a net profit of more than VND68 billion, up 41% over the same period.

Meanwhile, according to the consolidated financial report for the second quarter of 2023, Coteccons recorded net revenue of nearly VND 3,619 billion, an increase of 10% over the same period last year. The main revenue came from construction contracts, accounting for the majority with nearly VND 3,613 billion, the rest came from construction equipment rental of nearly VND 4 billion and office rental of more than VND 3 billion.

Coteccons's liabilities were recorded at over VND13,103 billion, up 22% from the beginning of the year. Of which, short-term loans and financial leasing debts were over VND697 billion; long-term financial loans were nearly VND498 billion. Notably, the debt to Ricons Construction Investment Joint Stock Company (Ricons) in this reporting period was not mentioned by Coteccons.

Coteccons announced that it has received Notice No. 10/TB-TA dated July 4, 2023 from the Ho Chi Minh City People's Court regarding the notice of acceptance of the petition to open bankruptcy proceedings. The plaintiff is Ricons Construction Investment Joint Stock Company.

Coteccons confirmed that there were transactions including receivables and payables (referred to as debts) between the two companies.

Debts arising from the period before 2019, Coteccons and Ricons are managed and identified as contributing components to an ecosystem of 7 interconnected member companies, including: Coteccons, Unicons, Ricons, Newtecons, BM Windows, Sol E&C, Boho.

During the operation process in the ecosystem, some projects where Ricons is the general contractor have generated transactions related to Coteccons as a subcontractor in projects such as: Regina Hung Yen Project, Dong A Project Design, Golden Palace Project and some equipment leasing transactions between the two companies. The debts that have arisen have not yet been settled due to problems in determining the value of the debt along with documents that meet legal requirements.

Similarly, some projects in which Coteccons acted as the general contractor and incurred debts for Ricons as a subcontractor have not been settled yet, such as: Newtatco Project, Regina Phase 4 Project, Regina Miracle Factory, Regina Phase 6, Regina Hung Yen Project, Vinfast Factory Project, Simco Project.

“ The above are the reasons leading to the dispute over the economic contract between the two companies. Coteccons has repeatedly requested direct meetings and documents, but Ricons has not been able to provide legal documents according to the requested debt value ,” the announcement on Coteccons’ website stated.

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