SHG is planning to transfer multiple investments to pay off debts
As of June 30, 2023, Song Hong Corporation (UPCoM: SHG) owes Triệu Châu Co., Ltd. a total amount of approximately VND 337 billion.
Specifically, SHG must fulfill the obligation to repay the creditor nearly VND 331 billion, including VND 69 billion in principal, over VND 4 billion in interest within the term, and nearly VND 140 billion in overdue interest. The total late interest until June 30, 2023 is over VND 118 billion.
This amount does not include overdue interest from July 01, 2023, calculated on the unpaid principal according to the agreed interest rate in the loan agreement in 2011.
In addition, the judgment also determines that SHG must repay Triệu Châu nearly VND 7 billion, including VND 6.7 billion in principal and VND 202 million in interest within the term. This is the amount SHG borrowed from Triệu Châu in a loan agreement of VND 7.5 billion in January 2022. This contract lasted only one month with an interest rate of 6% per year.
To resolve the execution of the judgment and repayment of the above loans, according to the agreement, the “creditor” requires SHG to transfer/sell all of its over 3.6 million shares in Song Hong Energy Joint Stock Company and the Royal Song Hong Hotel project (assets on land with land use rights). These two assets have a value deducted of VND 26.7 billion and VND 10 billion, respectively.
Construction-in-progress cost of Royal Song Hong Hotel on the semi-annual financial statements in 2023 of SHG. Source: SHG
|
Triệu Châu has agreed to waive the debt for part of SHG‘s obligation to execute the judgment of over VND 94 billion and the entire loan of VND 6.9 billion, including principal and interest, as well as the entire amount of late payment interest for the unpaid principal from July 01, 2023.
Therefore, Triệu Châu is responsible for requesting the Civil Execution Department of Tay Ho District to suspend the execution of the judgment for all principal amounts, interest within the term, overdue interest, and late payment interest according to the 2018 judgment of the Hanoi People’s Court and the 2021 execution decision of the Director of the Tay Ho District Civil Execution Department. At the same time, it is requested to suspend the implementation of the applied security measures and enforcement measures for SHG as well as the execution of the judgment according to the law.
Regarding the remaining VND 200 billion that must be paid after suspending the execution of the judgment, SHG and Triệu Châu have agreed to implement according to one or a combination of options.
Firstly, SHG pays in cash to Triệu Châu or a third party appointed by the creditor, when SHG has sufficient financial resources to ensure repayment. Or secondly, SHG continues to transfer/sell other assets to Triệu Châu and/or a third party appointed to reduce the debt repayment obligation. Or finally, Triệu Châu and/or a third party appointed will convert part or all of SHG‘s repayment obligation into contributed capital when SHG increases its charter capital.
Triệu Châu appeared on SHG‘s financial statements since 2021. Previously, the debt belonged to Vietnam Asset Management Company Limited. By mid-2023, SHG recorded short-term payment costs and long-term payable provisions for Triệu Châu of VND 120 billion and VND 212 billion, respectively.
Short-term payment costs and long-term payable provisions on the semi-annual financial statements in 2023 of SHG. Source: SHG
|
At the end of 2023, the Tay Ho District Civil Execution Department together with the Tay Ho District People’s Procuracy and the representatives of the local authorities carried out inventory, handling of assets executed according to the regulations of the law on 4 projects on the land at 70 An Duong Vuong, Yen Phu Ward, Tay Ho District, Hanoi.
Among them, project 1 is a 1-floor building, constructed on an area of 1.8 thousand m2 used by SHG as the main office. Project 2 is a warehouse and driver’s accommodation on a cement floor, with a roof area of 64m2. Project 3 is a 2-floor guardhouse, with a roof area of 48m2, and project 4 is a motorbike parking lot on a concrete floor, with a roof area of 206m2.
The total area of 2.9 thousand m2 of yards and asphalt roads, 1.6 thousand m2 of yards and brick-paved roads, 409m2 of yards and red-brick paved roads, and 684m2 of fenced walls surrounding the land area.
The Tay Ho District Civil Execution Department has completed the second appraisal of the value of assets, and on February 19, 2024 has just announced the selection results of the auctioning organization to sign a service contract for auctioning off the assets that have been listed according to the regulations of the law.
Recently, SHG‘s Board of Directors has approved the contents in the report of the General Director on the agreement plan for executing the judgment and repaying the loan for Triệu Châu to be able to have the Civil Execution Department suspend the execution of the obligations. At the same time, instruct and organize the implementation of related work according to regulations.
