Who is Hoang Anh Gia Lai’s New Creditor?

Hoang Anh Gia Lai Joint Stock Company (stock code: HAG) has announced a change in bondholders for its 2016 bond issuance.

BIDV Bank has transferred the entire debt to Vietnam Asset Management Company (DATC) – Ho Chi Minh City Branch. The transaction was executed through Contract No. 01/HĐCNTP-BIDV-DATC signed on December 29th.

The subject of the transfer is the entire HAG 2016 Series A bond issuance, identified as HAGLBOND16.26. These bonds were issued on December 30, 2016, with a 10-year maturity. The planned maturity date is December 30, 2026, meaning the debt is due for settlement in exactly one year.

At the time of transfer, the outstanding volume was recorded at 3,876 bonds with a face value of 1 billion VND per bond. These are non-convertible bonds, secured by assets, and carry a floating interest rate. Specifically, the issuance interest rate was recorded at 9.7% per annum, with periodic interest payments every 3 months.

Effective December 29th, BIDV no longer holds these bonds. DATC has assumed all legal rights and benefits, becoming the sole bondholder for the entire outstanding Series A bonds of Hoang Anh Gia Lai.

Following the completion of the transaction, Vietnam Asset Management Company has requested HAG to update information to implement the contents related to the rights and obligations of the bondholder in accordance with the law.

Vietnam Asset Management Company is a special enterprise with 100% state capital, under the Ministry of Finance, specializing in receiving and handling bad debts and distressed assets.

The HAGLBOND16.26 bonds were issued on December 30, 2016, at a time when HAG was facing significant financial burdens, with total loans reaching 36,000 billion VND and a liquidity crisis.

Mr. Doan Nguyen Duc (Bầu Đức), Chairman of HAG’s Board of Directors, recalled: “A debt of 36,000 billion VND was considered a staggering figure at that time. Liquidity loss is a euphemism; in reality, it was a declaration of bankruptcy. The question was, what to do? Clearly, HAG had lost credibility with friends, partners, and financial institutions.”

Subsequently, HAG entered a phase of massive asset sales, selling everything from hydropower plants, sugar mills, real estate projects, to even its most valuable assets like Hoang Anh Gia Lai Hospital, retaining only the Hoang Anh Gia Lai Football Academy.

In addition to asset sales, HAG decided on a comprehensive restructuring, shifting from rubber to fruit crops (bananas, durians) to generate short-term cash flow.

After 10 years of restructuring, from 36,000 billion VND in debt, HAG now owes only about 6,400 billion VND. The debt-to-equity ratio has dropped from over 2 times to 0.4 times. Secured assets have increased significantly. From cumulative losses of trillions, Bầu Đức now confidently sets a profit target of 2,000 billion VND per year, stating that this figure is “within reach.”