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Mr. Nguyen Quoc Cuong, CEO of QCG, speaking at the meeting. Photo: Tu Kinh
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Speaking at the 2024 Annual General Meeting of Shareholders held on the morning of July 30th, the CEO of Quoc Cuong Gia Lai Joint Stock Company (HOSE: QCG) shared that the Phuoc Kien project is pivotal for QCG. Mr. Cuong also reiterated that all documents and land use rights certificates previously given to Sunny Island have now been sealed by the police and cannot be used as collateral for any loans of Sunny Island or Van Thinh Phat.
“When we pay back more than 2.8 trillion VND, we will receive back all the documents and land use rights certificates for the 65ha that the Company transferred to Sunny Island previously,” said the new CEO of QCG.
Currently, the Company owes Sunny Island an advance payment of approximately 2.8 trillion VND. After the Vietnam International Arbitration Center (VIAC) ruling, QCG only has to refund 1.4 trillion VND, equivalent to 50% of the received amount. However, when Ms. Truong My Lan encountered legal issues, the police requested the annulment of the ruling, and QCG has submitted the case for appeal.
Regarding the project’s legal issues, due to the prolonged duration, many legal documents are no longer valid. However, if QCG settles the payment with Sunny Island and retrieves all the documents and land use rights certificates, the management team believes that they can continue with the project in the near future and put it into operation. Alternatively, they can also look for a reputable partner to collaborate on this project.
Where will the money to repay Sunny Island come from?
Disclosing the source of funds to repay Sunny Island, Mr. Cuong shared that in 2024 and early 2025, the Company will focus on clearing inventory from all projects, which could bring in more than 1,000 billion VND. Together with the revenue from the Marina Danang project and the transfer of hydropower projects, the amount needed to repay Sunny Island is feasible.
Regarding inventory, the management team mentioned that there are two types: inventory from unfinished projects and inventory from completed projects. The Company is prioritizing the sale of completed projects with actual products such as Lavida and Giai Viet. If difficulties persist in clearing inventory or selling new products, QCG will divest from some companies.
When asked about the reason for selling the hydropower projects despite their good revenue stream, Mr. Cuong explained that this decision is related to the amount of money the Company needs to repay to Sunny Island. The management team is still considering various options, including divesting from other real estate projects instead of the hydropower projects.
Mr. Cuong further shared that, at this point, it is challenging to predict whether the new Land Law will impact the Phuoc Kien project. However, starting from August 1st, there will be favorable conditions for this project. “The imposition of tax on land use right transfers may cause an increase in product prices in the future. But everything must comply with the regulations of the State, and I believe it won’t significantly affect the Phuoc Kien project. The biggest concern of Quoc Cuong Gia Lai at this point is the source of funds to repay Sunny Island and retrieve all the documents to continue with the project,” said the CEO of QCG.
Mr. Cuong stated that he could not disclose information about potential partners for the Phuoc Kien project to maintain confidentiality for all parties involved. However, according to the CEO, there are many interested partners, both domestic and foreign. But, for now, the primary focus is on retrieving the project’s legal documents from Sunny Island to be eligible for negotiations.
Regarding the 6B project in Binh Chanh district, QCG still has a row of townhouses and an apartment tower in this project. The project’s legal issues are stuck at the land price appraisal stage, and the Company is working with the Department of Finance and the Department of Natural Resources and Environment to resolve this matter.
The Marina Danang project is one of the projects with almost complete legal documentation and can be deployed in the earliest time frame. The Company is focusing on adjusting the 1/500 planning to be able to launch sales in the first quarter of 2025. Up to August 1st, QCG has fulfilled its financial obligations for this project.
“Surprised to take on the role of CEO of QCG”
When asked about managing both C-Holding and QCG, Mr. Cuong admitted that he was quite surprised to take on this role right before the meeting. He assured that he would do his best and shared that an unfortunate incident had occurred at QCG recently. “Everything is still under investigation, but the Company’s operations will not be affected. After taking on the role of CEO, I promise that all business and production activities of Quoc Cuong Gia Lai in the future will remain smooth and normal,” Mr. Cuong reassured shareholders.
According to Mr. Cuong, QCG currently has a positive aspect: if we look at the balance sheet, the annual debt repayment amount is less than 300 billion VND, accounting for only about 3% of total assets. He doesn’t consider this a pressure and has never been a pressure for the Company in the short and near term. Given the current financial situation and low debt ratio, QCG remains an attractive investment stock.
“In the short term, we don’t have debt repayment pressure,” Mr. Cuong confidently stated, adding that QCG holds many projects, land funds with high liquidity and feasibility for future development.
| Regarding the stock price falling to the floor for six consecutive sessions from July 19th to 26th, QCG attributed this to the information that Ms. Nguyen Thi Nhu Loan, the former CEO, was arrested and temporarily detained for investigation related to the 39-39B Ben Van Don project in District 4, Ho Chi Minh City. Additionally, the fluctuation is also due to market supply and demand, and investment decisions are made by investors independently and are beyond the Company’s control. |
Changes in the management team after Ms. Loan’s arrest
Apart from Mr. Nguyen Quoc Cuong taking his mother, Ms. Nguyen Thi Nhu Loan’s place on the Board of Directors, the meeting also elected Ms. Ha Thi Thu Thuy (born in 1981) as an Independent Member of the Board of Directors for the term 2022-2027, replacing Ms. Trinh Thi My Hanh, who resigned earlier for personal reasons. Ms. Thuy used to be the Deputy General Director of Quoc Cuong Land Joint Stock Company from 2018 to 2019. Since then, she has been the Deputy General Director of Lyn Property Joint Stock Company, which are both related parties of QCG.
Ms. Ha Thi Thu Thuy and Mr. Nguyen Quoc Cuong (both holding flowers) were elected as Members of the Board of Directors of QCG for the term 2022 – 2027. Photo: Tu Kinh
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