The Great Interest Payment Postponement: A Story of $8.6 Million in Bonds

Man Duong Joint Stock Company has reported to the Hanoi Stock Exchange (HNX) regarding delayed bond interest and principal payments for the first half of 2024.

According to the report, Man Duong was unable to make two interest payments for the DMBond2017 bond series on February 28, 2024, and May 31, 2024, totaling over VND 12.6 billion. The company cited inability to arrange funds as the reason for the delay and announced that the two interest payments will be postponed until June 30, 2025.

In fact, Man Duong has a history of delayed interest payments on this bond series. According to HNX, in 2023, the company failed to make interest payments four times and principal payment once, with outstanding interest and principal amounts totaling over VND 25 billion and VND 100 billion, respectively.

DMBond2017 is the only bond series currently issued by Man Duong, with a tenor of 7 years and a maturity date of November 20, 2024. The total issuance value is VND 200 billion, with an interest rate of 10.75% per annum, payable quarterly.

At the time of issuance, the collateral for this bond series was Man Duong’s gold plating system, valued at nearly VND 160 billion. In March 2018, the collateral was changed to machinery, vehicles, and office equipment.

In terms of financial performance, Man Duong reported a net loss of VND 50.7 billion in 2023, higher than the VND 33.6 billion loss in 2022. This marks the company’s fourth consecutive year of losses.

Previously, the company incurred losses of nearly VND 92 billion in 2020 and VND 51.5 billion in 2021. Cumulatively, Man Duong has lost approximately VND 228 billion over the past four years.

As a result of these losses, the company’s equity has significantly decreased by 69%, from nearly VND 125 billion at the beginning of the year to nearly VND 74 billion at the end of 2023.

The debt-to-equity ratio increased from 9.7 to 15.18, indicating a debt of VND 1,120.2 billion. Of this, bond debt accounts for nearly VND 200 billion.

Established in February 2002, Man Duong has a charter capital of VND 277.5 billion, with Mr. Nguyen Huu Duong holding an 88% stake and serving as the Chairman of the Board of Directors. Since September 2021, Mr. Tran Minh Thong has taken over as Chairman from Mr. Nguyen Huu Duong.

Man Duong is also a member of Hoa Binh Co., Ltd. (Hoa Binh Group). As of October 2022, Hoa Binh Group had a charter capital of VND 600 billion, with Mr. Nguyen Huu Duong serving as Chairman and holding a 47.68% stake.

Mr. Nguyen Huu Duong is also known as “Beer Duong” due to his reputation as the first producer of beer malt in Vietnam. Man Duong is a supplier of beer malt to various domestic beer manufacturers.