More businesses are late in paying their maturing bonds

The corporate bond market has continuously recorded delays in payment of principal and interest on maturing bonds. Illustration photo: L. Giang

Real estate bonds are slow to pay in series

Gia Duc Real Estate Company Limited is late in paying interest on bond code GDGCH2131001 with the interest payable amount of 35.7 billion VND. The planned payment date is June 30, 2024, however, the company has not yet arranged the money source. The company is expected to pay on July 10, 2024.

Gia Duc Real Estate operates mainly in the real estate business. However, the business situation of the enterprise in the past 2 years has been less positive with consecutive losses. Accordingly, Gia Duc lost 134 billion VND after tax in 2023, last year, the enterprise also reported a loss of 92 billion VND.

As of December 31, 2023, Gia Duc's equity was VND 3,299 billion, down 3.4% compared to 2022. Liabilities/equity were at 2.43 times, equivalent to the company's liabilities of VND 8,016 billion, up slightly by 4% compared to the previous year. Bond debt/equity was at 0.39 times, equivalent to bond debt of VND 1,286 billion.

Similarly, ADEC Joint Stock Company has just announced information related to the payment of principal and interest of bond code ADECH2123001, issuance value of 430 billion VND, issued on April 5, 2021, term of 36 months.

Accordingly, the company has paid the full interest of 6.5 billion VND. The principal amount to be paid is 100 billion VND, however, by April 5, 2024, ADEC has only paid 52.7 billion VND, the remaining amount is 47.3 billion VND.

The reason for the delay in payment was due to insufficient financial resources. ADEC said that the company will pay off the remaining principal debt of VND47.3 billion before December 31, 2024.

ADEC is a company operating in the fields of M&A, investment, development and real estate trading. According to the 2023 financial statements, ADEC's after-tax profit last year was only 1.3 billion VND, the previous year the company only made a profit of 500 million VND.

By the end of 2023, ADEC's equity will be at VND 634 billion, the debt/equity ratio will be at 0.67 times, equivalent to the enterprise's debt at VND 424 billion, an increase of 36% compared to 2022. Outstanding bonds/equity will be at 0.16 times, equivalent to ADEC's outstanding bonds at VND 101 billion at the end of 2023.

In addition, a series of real estate companies also announced late payments of principal and interest on bonds, such as Hoang Cat Real Estate Group Joint Stock Company, late in paying principal and interest of 333 billion VND. The company is negotiating with bondholders about the debt, but has not announced the expected repayment period.

Hoang Anh Gia Lai late in paying 4,364 billion VND

Notably, Hoang Anh Gia Lai Joint Stock Company (HAGL - code: HAG) is also on the list of enterprises that are late in paying principal and interest on maturing bonds with a fairly high level of overdue debt.

Accordingly, the company is late in paying the bond code HAGLBOND16.26. According to the plan, HAG must pay the periodic interest of nearly 140 billion VND for this bond lot on June 30, 2024.

This is a batch of HAG bonds that are late in payment in many payment periods. As of June 30, 2024, the cumulative late payment interest is VND 3,349 billion and the cumulative late payment principal is VND 1,015 billion. Thus, HAG is late in paying a total of VND 4,364 billion of maturing bonds.

The company said the reason for the delay in payment was that it had not yet collected enough money from the debt of Hoang Anh Gia Lai International Agriculture JSC (Code: HNG), but HAG said it had reached a three-party debt repayment agreement for this debt. In addition, some unprofitable assets that have not been liquidated have also affected cash flow. HAG is expected to pay the remaining amount in the third quarter of 2024.

Despite the delay in bond payments, HAG's business situation has been more stable over the past 3 years. In the first quarter of 2024, HAG's net profit was VND 215 billion, down 26% year-on-year. This is also the 12th consecutive quarter of net profit for HAG, starting from the second quarter of 2021.

Source: https://laodong.vn/kinh-doanh/them-loat-doanh-nghiep-cham-thanh-toan-no-trai-phieu-den-han-1362715.ldo