The Debt-Ridden Business: TTC Hospitality Puts Up Hotels as Collateral for Bond Issuance

According to a disclosure by the Hanoi Stock Exchange (HNX), TTC Hospitality (coded VNG on HoSE) has successfully issued bonds.

Specifically, on November 25, 2024, the company issued 5,000 bonds with the code VNGB2427001 and a par value of VND 100 million per bond. The issuance value was VND 500 billion, with a term of 36 months; expected to mature on November 25, 2027.

Other information was not disclosed. However, prior to this, TTC Hospitality had approved Resolution No. 29/2024/NQ-HĐQT dated November 21, 2024, on matters related to the offering and issuance of corporate bonds in a private placement in 2024 with a maximum par value of VND 500 billion.

According to this resolution, the assets securing the bonds include: All assets being the land use rights and assets attached to the land (whether currently formed or to be formed in the future) belonging to TTC Hotel Premium – Can Tho (Ninh Kieu District, Can Tho City) and all property rights related to this hotel (whether currently formed or to be formed in the future) owned by the company; All assets being the land use rights and assets attached to the land (whether currently formed or to be formed in the future) belonging to Hotel Michelia (Nha Trang City, Khanh Hoa Province) and all property rights related to Hotel Michelia (whether currently formed or to be formed in the future) owned by TTC Tourism Company Limited.

In addition, the assets securing the company’s obligations related to the bonds also include all capital contributions in TTC Tourism Company Limited together with the rights, interests and property rights arising from such capital contributions lawfully owned by TTC Hospitality; additional and/or substitute assets (if any) owned by the company and/or third parties.

Also according to the resolution of TTC Hospitality, the company’s payment obligations related to the bonds will be unconditionally and irrevocably guaranteed by Thanh Thanh Cong Investment Joint Stock Company.

TTC Hospitality’s bond issuance comes as the company is performing inefficiently. Specifically, the company’s consolidated after-tax profit in the third quarter of 2024 was nearly VND 41.7 billion loss while the same period last year still made a profit of over VND 1.3 billion; corresponding to a decrease of nearly VND 43 billion.

According to TTC Hospitality’s explanation, the main reason for the loss was the increase in depreciation expense and interest expense at subsidiaries when putting 5-star hotels into operation.

About TTC Hospitality, the company is introduced as the main force in the tourism industry of TTC Group. Besides tourism, TTC Group also strongly develops energy, agriculture, real estate, industrial real estate, etc.

As a multi-sector group with a series of prominent projects, in addition to its own capital, many enterprises in the TTC ecosystem also turn to bond issuance channels.

According to information on HNX, on September 20, 2024, Thanh Thanh Cong Investment Joint Stock Company (coded TTCIZ) has successfully issued 2,000 bonds with the code TTCCH2428001. With a par value of VND 100 million per bond, the total issuance value was VND 200 billion. This lot of bonds has a term of 4 years, expected to mature on September 20, 2028.

On October 17, 2024, the company continued to issue TTCCH2428002 bonds with a value of VND 150 billion.

Previously, the company also issued bond lots: TTCCH2327001 and TTCCH2327002 (both issued in 2023) with a total issuance value of VND 270 billion; TTCCH2226001 and TTCCH2229002 with a total issuance value of VND 675 billion (issued in 2022)

Going further, from June 2021 to December 2021, Thanh Thanh Cong Investment issued 4 lots of bonds with terms of 2-4 years, including: TTCCH2123001, TTCCH2123002, TTCCH2124003, and TTCCH2125004 with a total issuance value of 640 billion VND.

Thanh Thanh Cong Investment is known as the “core” enterprise in the TTC Group ecosystem of the businessman Dang Van Thanh family.

As of December 2018, the company’s charter capital was VND 3,000 billion, and the structure of shareholders was not disclosed.

Ms. Dang Huynh Uc My, daughter of Mr. Dang Van Thanh, used to hold the position of Chairman of the Board of Directors and legal representative of the company. Since January 2019, Mrs. Huynh Bich Ngoc – Mr. Dang Van Thanh’s wife, has been the General Director and representative of the company.

According to PV’s investigation, as of June 30, 2024, Thanh Thanh Cong Investment was a major shareholder of Thanh Thanh Cong – Bien Hoa Joint Stock Company (coded SBT on HoSE) with a ratio of 21.86%. Currently, Ms. Dang Huynh Uc My is the Chairman of the Board of Directors of TTC AgriS, replacing Mrs. Huynh Bich Ngoc.

In addition, Thanh Thanh Cong Investment is also a major shareholder of another enterprise in the TTC Group ecosystem, which is Gia Lai Electricity Joint Stock Company (coded GEG on HoSE). According to GEG’s reviewed consolidated financial statements for the first 6 months of 2024, Thanh Thanh Cong Investment holds 16.79% of the company’s capital.

Gia Lai Electricity operates mainly in the field of renewable energy, including hydropower, solar power, and wind power.

Back to the bonds of the “TTC” enterprises, recently, Thanh Thanh Cong Industrial Park Joint Stock Company (coded BIZ) announced the repayment of principal and interest of bonds.

Accordingly, in the first 6 months of 2024, TTC IZ paid nearly VND 3.2 billion in interest and VND 71.4 billion in principal for 2 lots of bonds BIZCH2124002 and BIZCH2124003. As of June 30, 2024, the outstanding value of these two bond lots was VND 100 billion and VND 138 billion, respectively.

It is known that both of these bond lots were issued in December 2021, aiming to invest in the construction and completion of technical infrastructure and utility works belonging to Thanh Thanh Cong Industrial Park (An Hoi Ward, An Hoa Ward, Trang Bang Town, Tay Ninh Province) with TTC IZ as the investor.

According to the Vietnam Securities Depository and Clearing Corporation (VSDC), 138,000 BIZCH2124003 bonds became invalid from October 28, 2024, due to the maturity of the bonds.

Also according to VSDC’s announcement, from October 30, 2024, 100,000 BIZ12101 (BIZCH2124002) bonds issued by VSDC will become invalid, and VSDC will not provide registration, depository, and payment services for BIZ12101 bonds. The reason for the cancellation is that the bonds have reached maturity.

Regarding TTC IZ’s bonds, also in 2021, the company issued the BIZCH2124001 bond lot with an issuance value of VND 62 billion with the same purpose as the above two bond lots. The BIZCH2124001 lot has a term of 3 years and is scheduled to mature on October 15, 2024. However, by the end of 2022, the TTC Industrial Park had fully repaid this bond lot.