A company borrowed nearly 5,900 taels of SJC gold, but after more than ten years could not pay it back.

Many banks are stuck with bad debts from gold loans - Photo: QUANG DINH

The Global Group Auction Company has just announced the auction of the debt of Saigon Seafood Trading Joint Stock Company (APT). This auction is at the request of Sacombank to handle bad debt.

In detail, the auction organizer said the debt arose from a credit contract from 2009. The total debt obligation amounted to VND1,768 billion.

Of which, the principal balance is nearly 530 billion VND, the interest due is more than 823 billion VND and the overdue interest is more than 415 billion VND. That is, after 15 years, the interest due and overdue to be paid is more than 2.3 times the loan capital.

After several unsuccessful sales, this time Sacombank reduced the debt price to more than 846 billion VND. The most recent time in July 2024, the debt was sold for more than 1,000 billion VND.

However, many opinions say that this is still quite high because the actual interest on this debt is many times higher than the principal. The auction of this debt is scheduled to be held tomorrow morning (August 21).

The auction organization’s announcement did not mention details of the credit contract between the two parties. Based on APT’s financial report, it can be seen that this enterprise mainly borrowed gold, with the remaining part in cash.

Specifically, the audited financial report for 2023 recorded that APT had a loan of 5,833 taels of SJC gold arising from a credit contract from 2009 at Sacombank (formerly Phuong Nam Commercial Joint Stock Bank).

There is also a credit contract with a limit of 103 billion VND, term of 12 months (from 2009 to 2010) with an interest rate of 12%/year.

For gold loans in particular, APT regularly re-evaluates the loan principal according to fluctuations in the price of this precious metal at the end of the year.

Meanwhile, gold prices have fluctuated strongly in recent years, causing headaches not only for APT but also for many other businesses and individuals borrowing gold.

Specifically, according to WiGroup data , SJC gold's buying and selling prices were 40.8 - 41.8 million VND/tael respectively on January 1, 2012.

By the end of 2023, the listed selling price of SJC gold at Saigon Jewelry Company Limited is 73 million VND/tael.

Regarding the reason for not paying the overdue debt, APT said it was due to "inability to pay". In reality, this business was doing poorly and suffering heavy losses.

Accumulated losses of thousands of billions, businesses cannot repay gold loans

In the 2023 financial report, the auditor gave an exception opinion when APT accumulated losses of up to 1,354 billion VND, negative equity of 1,264 billion VND. Thus, the accumulated loss is 15.39 times larger than the company's charter capital (88 billion VND).

In addition, short-term debts are 1,328 billion VND larger than short-term assets. Total liabilities are 1,435 billion VND, 16.3 times larger than the company's charter capital, of which the total overdue debt is up to 1,415 billion VND. Overdue debt related to banks alone accounts for 1,374 billion VND.

The above issues together with the issues APT mentioned related to overdue loans at Sacombank show the existence of a material uncertainty that casts significant doubt on the company's ability to continue as a going concern, the auditors said.

Source: https://tuoitre.vn/mot-cong-ty-vay-gan-5-900-luong-vang-sjc-hon-chuc-nam-khong-tra-noi-20240820193824598.htm