The Business Venture’s Bold Move: Reviving Mr. Dũng’s Struggling Empire, Riddled with Tax Debts

NRC, or Danh Khoi Joint Stock Group, sought shareholder approval for a plan to privately issue 100 million shares to professional securities investors back in late June 2024. The offering price was set at VND 10,000 per share.

With expected proceeds of VND 1,000 billion, Danh Khoi (NRC) intends to allocate VND 520 billion to settle its tax liabilities, fully repay its bond debts, and clear its outstanding loans with BIDV bank.

Approximately VND 195 billion will be used to partially fund the purchase of the Dai Nam Residential Area project (a large-scale development spanning over 96.7 hectares in Chon Thanh District, Binh Phuoc Province). This project is spearheaded by Tan Khai One-Member Limited Company, chaired by Mr. Huynh Uy Dung (known as Dung “Lo Voi”).

Another VND 180 billion will go towards acquiring a portion of the Ham Thang – Ham Lien small-scale industrial, commercial, and service residential area project.

The remaining VND 105 billion will be injected into the company’s working capital to facilitate its production and business operations.

Turning to Danh Khoi’s financial performance, according to its reviewed semi-annual financial statements for 2024, the company recorded a revenue of VND 2.6 billion, marking a 77.8% decrease compared to its self-prepared reports. This reduction is attributed to adjustments in revenue recognition for consulting contracts.

The company’s financial statements also underwent a transformation from profit to loss after the review. A post-tax loss of over VND 10 billion was recognized, contrasting the previously reported profit of VND 7.1 billion in the self-prepared reports. Nonetheless, this loss reflects an improvement compared to the same period last year, which saw a loss of VND 35.4 billion.

Danh Khoi Group further elaborated on the challenging macroeconomic conditions that persisted during the first half of 2024, significantly impacting their business operations. While the real estate market is showing signs of recovery, it continues to face obstacles. Government policies aimed at alleviating difficulties have yet to reach businesses, and the corporate bond market remains unstable. Additionally, rising interest rates and the predominance of apartment complex transactions in the recovering real estate market, coupled with the stagnation in land sales, have forced enterprises to operate intermittently to maintain their viability.

Beyond its business losses, Danh Khoi also grapples with tax debts and overdue bond payments. As of June 30, the company held short-term financial debts totaling over VND 342 billion and long-term financial debts exceeding VND 46 billion. Notably, the company held over VND 256 billion in bond debts, including overdue bonds amounting to VND 139.5 billion, along with nearly VND 24 billion in accrued interest.

Moreover, the company received a decision from the Ho Chi Minh City Tax Department to suspend its invoice usage from November 13, 2023, to November 12, 2024, due to outstanding tax liabilities. As per the second-quarter financial statements, NRC owed taxes amounting to VND 102.2 billion, with late payment interest on various taxes totaling VND 25.6 billion. The company also had outstanding payments to its employees, totaling nearly VND 6.8 billion.