In 2023, FLC Corporation (UPCoM: FLC) has to pay a total of 120 billion VND in interest and 996.4 billion VND in principal to settle the FLC bond series FLCH2123003, but only a very small portion was paid by the end of the year, 6 billion VND and 100 million VND respectively.
FLC is currently in negotiations with the bondholders to propose an extension plan, with the expected payment date now set before December 28, 2025 if agreed upon by the bondholders.
By the end of 2023, FLC had proposed four options to the bondholders for the payment of the bond series, mainly revolving around exploiting, transferring, or offsetting against the FLC Hai Ninh 2 project, but none of the options were approved.
FLC faces nearly 1.1 trillion VND bond default, seeks extension until 2025.
FLC Hai Ninh 2 is part of the FLC Quang Binh ecotourism complex. The mega project has a total investment capital of 20 trillion VND and is implemented on an area of 1,954 hectares. As of the end of 2022, the project has put into operation two golf courses and a number of seaside villas.
The FLCH2123003 bond series has a face value of 1.15 trillion VND, issued by FLC in December 2021 at an annual interest rate of 12%, initially planned for maturity in December 2023. The agreement allows bondholders the right to request early redemption by the company at 12 months, 15 months, and 18 months from the bond purchase date.
Redemption schedule for the FLC2123003 bond series according to the initial agreement. Source: FLC
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By September 2023, FLC had repurchased 153 billion VND. Since then, the company has continued with three repurchase rounds, amounting to 200 million VND, 750 million VND, and 150 million VND respectively. As of the end of February 2024, FLC still owes nearly 996 billion VND in principal. This is also the entire remaining bond debt of the company as announced on the Hanoi Stock Exchange (HNX).
In addition to the aforementioned bond series, FLC also has a 430 billion VND bond series FLCH2124002 with a maturity date of October 2024 according to the plan, issued from October 2021 but fully repurchased ahead of maturity in 2022.
This is a secured bond series, non-convertible and without attached warrants, with an issuance interest rate of 10.5% per annum. The proceeds were used to invest in the development of Phase 1 of a residential project in Ha Khanh Ward, Halong City, Quang Ninh Province (commercially known as the FLC Tropical City 1 project).
At the recent extraordinary shareholders’ meeting in 2024, FLC’s leadership announced efforts to comprehensively restructure the company in order to meet business operation requirements. Projects across the country are being reactivated, such as the FLC Quang Binh project, FLC Tropical project (Halong), FLC Premier Parc project, Kon Tum project, etc. FLC currently still owes 600 billion VND in tax and financial obligations to the State.
FLC Quang Binh’s 20 trillion VND project in ruins.
Rendering of FLC Tropical Halong City project. Source: FLC
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Tu Kinh
