Legamex workers manufacturing fabric bags – Illustration
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Legamex Joint Stock Company (LGM, UPCoM: LGM) has just decided to temporarily halt its manufacturing operations from May 2025 to curb losses and alleviate financial strain in the upcoming period. This is the company’s main business field and primary source of revenue. The suspension will last until the textile industry recovers and Legamex has sufficient resources to resume operations.
Following the sudden loss of a fabric bag order in September 2022 (a consequence of the lawsuit between Gilimex and Amazon), Legamex shifted its focus to manufacturing fashion garments in late 2023. Due to limited resources, the company could only cater to domestic partners and was unable to pursue export orders.
As of the end of 2024, Legamex had 202 employees, a significant decrease from the 270 employees at the beginning of the year. Challenges with salaries, bonuses, and welfare benefits made it difficult to retain existing staff and attract new talent, falling short of the company’s plans. Most of the production equipment is over ten years old, and the lack of investment in new machinery has significantly impacted productivity.
Meanwhile, the 2025 General Meeting of Shareholders of LGM also approved the addition of new business lines such as warehousing, goods storage, retail sales of medicines, medical devices, cosmetics, and sanitary products to expand the company’s business scope amid difficulties.
Accumulated loss exceeds VND 166 billion, owner’s equity turns negative at VND 79 billion
Legamex has incurred losses for six consecutive years, peaking at a record loss of nearly VND 63 billion in 2023. The company continued to lose more than VND 33 billion in 2024, bringing the total accumulated loss to over VND 166 billion and causing owner’s equity to turn negative at nearly VND 79 billion. According to Legamex, the loss in 2024 decreased due to cost-cutting measures, asset disposals, and the absence of bad debt provisions compared to the previous year.
| LGM’s business results in the 2018-2024 period |
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As of the end of 2024, the company’s total liabilities increased to nearly VND 158 billion, with financial debt reaching VND 88.8 billion, 4.8 times higher than at the beginning of the year. Notably, the loan from Mr. Dinh Van Chien increased significantly from VND 6 billion to VND 41 billion, and new loans were taken from Mr. Nguyen Thanh Quoc (VND 30.3 billion) and Mrs. Nguyen Ngoc Minh Thu (VND 17.5 billion).
In this context, Legamex has just completed a private placement of 4.44 million shares at a price of VND 15,000/share, raising VND 66.6 billion and increasing its charter capital to VND 118.4 billion. Most of these shares were purchased by its parent company, Hanoi Textile and Trading Company Limited, increasing its ownership to over 79%.
Initially, the proceeds from the capital raising were planned to be allocated to land rent, interest, and social insurance payments. However, the plan was adjusted, and the entire VND 66.6 billion was used to repay financial debts. Specifically, the company maintained the allocation of VND 18.5 billion for the repayment of old loans, and the remaining VND 48.1 billion was used to settle new loans incurred in 2024.
These loans carry interest rates ranging from 6.2% to 8% per annum, with short-term maturities of 2 to 6 months, intended to supplement working capital, including land rent payments. Legamex explained that during the waiting period for the completion of the issuance, debts continuously arose and became due for payment, necessitating the immediate settlement of these urgent obligations.
Management changes and former shareholders exit
Regarding personnel, ahead of the 2025 General Meeting of Shareholders, Mr. Le Hong Chien – CEO of LGM – submitted his resignation on March 11, 2025, for personal reasons. At the recent annual General Meeting of Shareholders, Mr. Chien was also relieved of his duties as a member of the Board of Directors, and Mr. Huynh Tang Phuc Hau was elected to the Board of Directors. Previously, Mr. Hau was appointed as the new CEO, replacing Mr. Chien.
Additionally, in early April, there was a change in the position of Chief Accountant as Mrs. Nguyen Thi Lan Tra resigned, and Mr. Vo Phu Hung, former Head of Administration and Personnel, was appointed to the role for a term of one year.
Mr. Chien’s departure also marks the end of Giditex’s influence at Legamex. Mr. Chien served as the CEO of Giditex, an organization that once held up to 51% of LGM’s capital during the enterprise’s equitization. However, from mid-2023, Giditex continuously divested and officially exited its ownership in LGM in early 2024. Shortly after, the entire Board of Directors and Supervisory Board for the 2021-2026 term, including former Chairman Le Xuan Khanh, submitted their resignations.
Concurrently with the management changes, LGM witnessed a significant shift in its shareholder structure. In mid-May 2024, a group of major shareholders holding a combined 72.67% of the capital completely divested their ownership in the company. All of these shares were transferred to Hanoi Textile and Trading Company Limited – a newly established legal entity on March 25, 2024, just one month before the annual General Meeting of Shareholders.
Hanoi Textile and Trading Company Limited is headquartered in District 3, Ho Chi Minh City, primarily engaged in management consulting, with a charter capital of VND 90 billion. Notably, the ownership structure of this entity is directly related to LGM’s former shareholders.
Specifically, Mr. Do Van Huy, one of the individuals who divested from LGM, holds 80% of Hanoi Textile and Trading Company Limited, while Ms. Bui Thi Thuy Chung, another major shareholder who sold her stake, owns the remaining 20%. This move is seen as a transition from individual to related organizational ownership.
On the stock market, LGM’s shares are currently under warning and trading restrictions. As of the session on May 16, LGM’s market price stood at VND 12,200 per share, up over 23% in one month but still down 18% in the past quarter, with extremely low liquidity, averaging only 190 shares per day.
| LGM share price movement in the last year |
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– 13:52 19/05/2025
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