Real estate tycoon has nearly 2,300 billion VND in debt seized by the bank

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Phu Tai branch has just announced the offering and searching for a unit to appraise the value of bad debt of Thuan Thao Nam Sai Gon Joint Stock Company. The outstanding principal of BIDV Phu Tai for Thuan Thao Nam Sai Gon and 95 related individual customers is worth more than VND1,208 billion. The interest as of the end of last year was VND1,070 billion.

This loan is secured by the company's headquarters in District 1 and two plots of land with a total area of ​​22 hectares in Binh Chanh District. 5.2 million shares of Thuan Thao Joint Stock Company (stock code: GTT) are also used as collateral, but the current value of this block of shares is less than 3 billion VND.

Thuan Thao Nam Sai Gon is a company established in 2004 by Ms. Vo Thi Thanh - Chairman of the Board of Directors of Thuan Thao with the goal of entering the real estate market after a resounding success in the field of passenger transport. The company's main business line is civil construction. After nearly ten years of operation, the company was approved by the Ho Chi Minh City People's Committee as the investor of the Tay Saigon social housing project.

This is also the time when Thuan Thao Nam Sai Gon is actively borrowing capital from banks and partners to develop the project. After BIDV Phu Tai, the company signed a loan contract of 400 billion VND from Thuan Thao with a term of one year and an interest rate of 14.4%.

Due to investment difficulties, at the end of that year, the two parties agreed to adjust the loan term to 24 months and not charge interest in 2014. The company's management board had assessed that this was a potential project and would not face any risks in debt collection. In fact, by the end of last year, Thuan Thao Nam Sai Gon had not yet paid the principal and interest of up to VND453 billion, forcing Thuan Thao to admit that it was unable to recover and set aside provisions for the entire loan. The company's capital was severely affected after the misstep in real estate, leading to a lack of working capital for production and an unbalanced financial situation.

The financial report for the fourth quarter of 2017 just announced by Thuan Thao shows that the gross profit margin has improved to nearly 33% thanks to the company boldly closing some ineffective business segments and handling mortgaged assets that are borrowing capital from banks to have a source of money for the restructuring process.

Accumulated net revenue and after-tax profit reached VND48 billion and negative VND160 billion, respectively. Although it did not fulfill the plan set at the beginning of the year to reduce losses to VND112 billion, this result was still much better than the loss of VND300 billion last year.

Currently, the company is still facing a series of difficulties such as seriously degraded assets but not being able to access investment capital for upgrading, some projects such as eco-tourism areas, 5-star hotels... have standards beyond the local market, so revenue is meager. In addition, restructuring has not been as expected when fixed costs such as salaries, depreciation, and business management are still too high.

Orient