Hoa Binh Construction recovers more than 300 billion VND debt from FLC

Hoa Binh Construction Group has recovered about VND304 billion related to the FLC Sam Son project, which the company won a lawsuit in 2020.

The debt collection of Hoa Binh Construction Group Joint Stock Company (HBC) was completed on October 12. The above amount includes more than VND 270 billion in cash and VND 34 billion in real estate from FLC Group.

The debt of more than VND300 billion is related to the FLC Sam Son Eco-Urban Area (Thanh Hoa). In 2014, Hoa Binh and FLC signed contracts to construct the Fusion and Alacarte areas of this project. Hoa Binh completed the contract at the end of 2015 and the project was put into use. However, by 2020, HBC said that FLC had not yet paid its debt, so it filed two lawsuits against FLC at the People's Court of Cau Giay District (Hanoi) and the Vietnam International Arbitration Center (VIAC).

At the end of 2020, the People's Court of Cau Giay District accepted all the lawsuit requests, rejected the counterclaim and forced FLC to pay 42 billion VND to Hoa Binh. VIAC also made a similar decision and forced FLC to pay nearly 235 billion VND. FLC did not agree with the above result and sent a request to cancel the judgment to the People's Court of Ho Chi Minh City, but this agency did not accept. After that, the two parties reached an agreement and FLC agreed to pay according to the schedule.

Recently, Hoa Binh has continuously won many debt collection lawsuits. On the same day, October 12, the People's Court of Quy Nhon City accepted all of HBC's requests, forcing Vi Khoa Hoc Company Limited (the investor of the hotel project of the same name) to pay more than 100 billion VND. A day earlier, VIAC also ruled that Urban Development and Construction Joint Stock Company must pay Hoa Binh nearly 162 billion VND.

Debt collection is one of the strategic actions of Hoa Binh Construction in the reconstruction phase after many quarters of business losses and power struggles. Recently, the accumulated loss of more than VND 2,800 billion as of the end of the second quarter and overdue loans have caused HBC to be questioned by the auditor about its ability to continue operating.

At the annual meeting at the end of May, Chairman of the Board of Directors Le Viet Hai said that out of 21 lawsuits regarding late payment, 10 had court rulings and Hoa Binh won all of them. According to Vice Chairman of the Board of Directors Le Viet Hieu, the company has more than 1,000 billion VND in debt recognized by the enforcement agency and has recovered more than 500 billion VND. Of which, the Cocobay lawsuit with a total debt of 374 billion VND, this company has received 140 billion VND.

The audited semi-annual consolidated financial report shows that HBC's short-term receivables are nearly VND9,100 billion, accounting for about two-thirds of total assets. Of which, more than VND5,400 billion is receivable from customers and nearly VND3,800 billion is collected according to the construction contract schedule. The company has set aside a provision for short-term doubtful receivables of nearly VND2,500 billion.

Siddhartha

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