In a recent resolution dated September 24, the HHV Board of Directors approved a collaboration agreement with the Joint Stock Company Cao Toc Dong Dang – Tra Linh to jointly develop the aforementioned expressway project. HHV will contribute a maximum of VND 600 billion from the signing of the collaboration agreement until December 31, 2026, or until the funds are fully disbursed, whichever comes first.
Meanwhile, the Cao Toc Dong Dang – Tra Linh Company will contribute equity capital as stipulated in the BOT contract, following the disbursement schedule approved by the competent state agency.
Should the specified timeframe elapse before full disbursement, both parties will negotiate an extension, adjusting the contribution schedule to ensure compliance with legal regulations and the contract. They will also adjust the value and scope of each party’s project contributions.
Additionally, the Cao Toc Dong Dang – Tra Linh Company will contribute manpower and be responsible for managing and directly investing in and operating the project. They will utilize their experience, personnel, equity capital, joint venture funds, credit loans, and other legal sources of capital. As the project’s primary investor, the Cao Toc Dong Dang – Tra Linh Company will also address all issues that arise during the project’s execution.
A section of the expressway under construction. Source: vov.gov.vn
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Regarding the scope of collaboration, HHV and the Cao Toc Dong Dang – Tra Linh Company will jointly execute the expressway project, sharing profits, benefits, and products derived from their partnership. They will operate the project by harmonizing the interests of all parties, sharing responsibilities, and allocating risks in compliance with legal regulations and the signed BOT contract.
Specifically, HHV is entitled to maximum profits, equivalent to the interest rate of other legal capital sources stipulated in the BOT contract, multiplied by HHV‘s actual contribution value at the time of profit distribution, corresponding to the project’s utilization period of HHV‘s collaborative contribution.
The Board of Directors authorizes General Director Nguyen Quang Huy to negotiate and agree with partners on the specific interest rate at the time of contract signing, ensuring compliance with legal regulations and aligning with the practical situation while balancing the interests of all involved parties.
The Cao Toc Dong Dang – Tra Linh Company, on the other hand, will be entitled to profits equivalent to the interest rate of equity capital specified in the BOT contract, multiplied by the value of their project investment. They reserve the right to decide on the utilization of any remaining profits after fulfilling obligations to the lending bank, covering operational expenses and other costs, tax liabilities, and other obligations to the state, as well as distributing profits for the mobilized capital of participating partners.
In the event of project losses, both parties will negotiate to share responsibility for this business outcome, with each party assuming responsibility according to their contribution scope and proportion.
The collaboration period corresponds to the project’s toll collection period and will be automatically adjusted if there are changes to the toll collection timeframe. Within 30 working days from the end of the collaboration period, both parties must finalize the project’s financial settlement and determine each party’s profits or losses. Within 10 working days of completing the settlement, the parties will fulfill any remaining obligations as stipulated in the contract.
The Cao Toc Dong Dang – Tra Linh Company, established in late 2023 in Cao Bang city, Cao Bang province, is a project enterprise executing the BOT contract, with Mr. Nguyen Quang Vinh as its Director and legal representative. Additionally, the Cao Toc Dong Dang – Tra Linh Company is affiliated with HHV Vice Chairman – Mr. Nguyen Huu Hung.
Mr. Nguyen Quang Vinh during a session proposing solutions to project obstacles. Source: mt.gov.vn
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The investment project for the construction of the Dong Dang – Tra Linh expressway, implemented in the form of a Public-Private Partnership (PPP), has a total investment of over VND 14,300 billion for approximately 93 kilometers, with a 41-kilometer section passing through Cao Bang province.
This includes VND 6,600 billion in state budget capital, VND 6,300 billion in loans, and VND 1,400 billion in owner’s equity. The construction is expected to take place from December 19, 2023, to December 15, 2026, with a projected toll collection period of 25 years and 3 months from the date of the project’s operation.
As per the commitment signed between HHV and the companies, including the parent company of the Deo Ca Group, ICV Vietnam Investment and Construction, and Construction Works 568, regarding the selection of investors for the above project, HHV will contribute 15% of the charter capital of the Cao Toc Dong Dang – Tra Linh Company, amounting to over VND 216 billion.
As of June 30, 2024, the actual charter capital contributed to the Cao Toc Dong Dang – Tra Linh Company was VND 50 billion, of which HHV‘s contribution was 15%, equivalent to VND 7.5 billion.
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