Saigon Glory Bond Scandal: Bitexco Chairman’s Plea for Payment Extension

Mr. Vu Quang Hoi, Chairman of Bitexco Group, has recently sent a heartfelt letter to the bond investors of Saigon Glory Company requesting an extension for the payment deadline.


Bitexco Chairman writes a letter requesting payment extension

Most recently, Mr. Vu Quang Hoi, Chairman of Bitexco Group, sent a letter to bondholders at Saigon Glory Company, the owner of The Spirit of Saigon project (District 1, Ho Chi Minh City).

In the letter, Chairman of Bitexco Group stated that due to the internal issues of the related parties within Saigon Glory Company and the Ben Thanh Quadrangle project that have not been resolved. Although Bitexco Group no longer plays a major role in Saigon Glory Company and Bitexco Group is also facing many difficulties. However, he and Bitexco Group still decide to take on the obligations related to the bond packages issued by Saigon Glory LLC.

“As the highest leader of Bitexco Group, my aspiration is to preserve the value and ensure the investment benefits, as well as prioritizing the overall social welfare,” wrote Mr. Vu Quang Hoi in the letter.

Letter from Mr. Vu Quang Hoi, Chairman of Bitexco Group, addressed to investors.

In the letter, Chairman of Bitexco Group also stated that in the current reality at Saigon Glory Company and Ben Thanh Quadrangle project, as well as other legal and financial obligations of the related parties, the handling of collateral assets will become increasingly difficult and complex.

“The best solution is for you to agree to extend the principal and interest payment period of the bonds to have more time to restructure the financial sources and promote investment, construction, and business activities for the project in order to soon have centralized revenue for bond payments,” wrote Mr. Vu Quang Hoi.

According to Mr. Vu Quang Hoi, Chairman of Bitexco Group, the company has developed a financial plan to pay the principal and interest of the bonds specifically shown in the opinion note content. He hopes to receive the agreement and support from bondholders and is grateful for that.

“With the responsibility of the head of Bitexco Group, I commit that the payment of the principal and interest of the bonds will be fully implemented according to the plan and payment plan in the opinion note content,” affirmed Chairman of Bitexco Group.

In addition, Mr. Vu Quang Hoi expressed that Bitexco Group and Saigon Glory LLC are eagerly hoping to receive the vote of bondholders to meet the bond conditions’ specified ratio for paying the principal and interest of the first period before the Lunar New Year of Giap Thin.

Saigon Glory investors cry for help

As previously reported, the Cong Thuong newspaper received letters from a series of investors reflecting on the fact that they have not received the principal and interest payments from Saigon Glory LLC (located at 1 Pham Ngu Lao Street, Nguyen Thai Binh Ward, district 1, Ho Chi Minh City) for several months.

In 2020, Saigon Glory Company issued 10 individual bond lots with a value of VND 10,000 billion to nearly 4,000 bondholders to implement The Spirit of Saigon project: an office-commercial-service-apartment-hotel complex at 1 Pham Ngu Lao Street, Nguyen Thai Binh Ward, district 1, Ho Chi Minh City. These bond lots had a term of 3-5 years and a minimum interest rate of 11% in the first year. Of the total, VND 5,000 billion was due in June-July 2023 and VND 5,000 billion was due in August 2025.

The collateral assets were the contributed capital at Saigon Glory LLC, including the building on land to be formed in the future, Tower A – a hotel and office building formed on the project land. The issuance of the bond lots went through Tan Viet Securities Joint Stock Company (TVSI); the auditing organization was ATC Audit and Valuation Company Limited – HCMC Branch.

10 issued bond lots of Saigon Glory.

Until October 2022, after the problems regarding the ability to pay the bonds on the financial market related to the arrest of the Van Thinh Phat Group’s leadership, Saigon Glory committed to repurchasing the entire VND 10,000 billion bond before the maturity date in 2 stages. In stage 1, the company will repurchase VND 5,000 billion bond lots before no later than June 12, 2023, and stage 2 before no later than June 12, 2024.

According to the investors’ feedback, in the bond announcement and terms, Saigon Glory issued the bonds to implement The Spirit of Saigon project, and the company not only raised bond capital from individual investors but also from many other sources with the purpose of investment and development. However, after discovering that the project has stopped construction and is not continuing to develop, many investors questioned how the company used the raised capital.

According to the investors’ feedback, from the bond maturity date until now, despite several requests from the bondholders, both the issuing organization and Bitexco Group, the parent company of Saigon Glory, have shown an uncooperative and uncooperative attitude in debt repayment and handling collateral assets to repay investors.

After a period of investors sending letters to the functional agencies, on September 20, 2023, Saigon Glory Company sent a document to the bank and TVSI regarding the coordination of handing over the collateral assets. On October 6, 2023, Saigon Glory, the bank, and TVSI held a trilateral meeting to discuss the details and agree on the process of transferring and handling collateral assets for the next steps.

At the collateral asset handover meeting of the bonds on October 6, 2023, the Asset Management Organization stated that, based on the provisions in the bond documents, from June 2023 until the meeting, the Asset Management Organization had requested the issuing organization to revalue the collateral assets 5 times, but did not receive a response from the issuing organization. In September 2023, the Asset Management Organization actively advanced the cost to carry out the revaluation.

Notably, through the valuation process, the revalued value of the collateral assets was determined to be VND 4,653 billion for Tower A of The Spirit of Saigon project according to the valuation certificate on August 30, 2023, issued by DPV Audit Company Limited, and the revalued value of the contributed capital of the issuing organization was evaluated at negative VND 1,028 billion based on the evaluation report on September 2023 of DSC Securities Joint Stock Company – HCMC Branch.

According to reporters of Cong Thuong newspaper’s research, although Saigon Glory raised tens of trillions from bonds to implement The Spirit of Saigon project, the project is still unfinished and has even been delayed for a long time.

According to information from the announcement at the Hanoi Stock Exchange (HNX), in 2022, Saigon Glory had a loss of over VND 152.3 billion, while the same period last year had a profit of nearly VND 290.5 billion. The owner’s equity decreased compared to the same period, to more than VND 6,847 billion. The debt-to-equity ratio is 3.99 times. Thus, the current Saigon Glory company has more than VND 27,300 billion of debt.

Previously, in June, July, and August 2023, Saigon Glory Company sent documents to the Hanoi Stock Exchange (HNX), announcing the delay in payment of 5 bond lots worth VND 5,000 billion in total.

These bond lots have the codes SGL-2020.01, SGL-2020.02, SGL-2020.03, SGL-2020.04, and SGL-2020.05, issued from June and July 2020, a term of 3 years, matured in June, and July of this year. However, at the payment deadline, Saigon Glory delayed payment of the principal or both principal and interest.

The reason given by the company was that the financial market and real estate trading market did not favorably develop, leading to not being able to arrange the money to pay on time as planned.

It is known that Saigon Glory Company was established in June 2018, and currently, the company has a charter capital of VND 7,000 billion, Mr. Trinh Quang Cong serves as the CEO, and Mr. Vu Quang Bao serves as the Chairman of the Board of Directors.

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