Nam O’s $4.5 billion eco-tourism zone struggles with bond payments

According to information from the Hanoi Stock Exchange (HNX), Trung Thuy – Da Nang has announced that it has delayed the payment of 325 billion VND of principal and nearly 77.4 billion VND of interest for the above-mentioned bond batch, with the reason being that the source of funds has not been received by the payment due date of 01/15. The actual payment dates are 01/16 for interest and 01/19 for principal, which is later than the planned dates.

The bond TDNCH2225001 has a volume of 13,000 bond units, a face value of 100 million VND per unit, corresponding to a total value of 1,300 billion VND. The interest is paid every 6 months, with the first interest payment period being 12 months from the issuance date, at an interest rate of 10% per year.

The bond was issued on 01/14/2022, with a maturity period of 42 months until 07/14/2025. The depository institution is Tien Phong Commercial Joint Stock Bank (TPBank, HOSE: TPB). According to data from HNX, this is the only bond batch that the Company is currently circulating.

In early April 2022, Trung Thuy – Da Nang had two collateral transactions at TPBank. One transaction had the collateral of all the benefits obtained from the business activities of exploiting the value of land use rights, assets attached to the project, namely the Nam O ecotourism area, in Hoa Hiep Nam ward, Lien Chieu district, Da Nang City, where Trung Thuy – Da Nang is the investor.

The other transaction had the collateral of all the funds in the Company’s account at TPBank and the funds according to the deposit agreements established by the Company before, during, and after the date of the loan pledge contract, from a portion or the entire balance in the account; and all rights, benefits, reimbursements, and other payments that the Company has received or will receive arising from or related to any of the above-mentioned assets.

Nam O ecotourism area covers a total area of 35 hectares, including a 25-hectare project area and a 10-hectare coastal area, stretching over 3 km of coastline, located in the Nam O fishing village, Hoa Hiep Nam ward, Lien Chieu district, Da Nang City. The total investment capital is approximately 4,800 billion VND. The project includes various facilities such as hotels, beach villas, spas, swimming pools, and other beach entertainment activities.

Although it was approved by the Da Nang City People’s Committee to change the investor in 2010, from the previous investor – Cu Lao Cham Trading and Investment Joint Stock Company, and also adjusted the project area from 36.6 hectares to 25 hectares, excluding the rocky hill from the project to create a community tourism area. However, it was not until 04/15/2023 that the project was officially started. According to research, the project has been “at a standstill” due to difficulties in resettlement and compensation.

Nam O project rendering

Trung Thuy Da Nang Joint Stock Company was established in October 2010 with an initial charter capital of 6 billion VND. The founding shareholders are Trung Thuy Group Joint Stock Company and two father and son, Nguyen Van Trung and Nguyen Trung Tin (also known as the husband of Miss Vietnam 2012 Dang Thu Thao). In the latest business registration change in December 2019, the Company has a capital of 735 billion VND, and Mr. Trung is the Chairman of the Board of Directors and the legal representative.

According to financial results data, Trung Thuy – Da Nang achieved a profit of over 1.5 billion VND in the first 6 months of 2023, and a loss of nearly 95 billion VND in 2022.

Regarding the capital structure, as of 06/30/2023, the Company has over 2,011 billion VND of liabilities, of which nearly 1,274 billion VND is bond debt, corresponding to 1.66 times the equity capital.

Huy Khai