Before the time of tightening the issuance regulations, a group of companies related to a super project in Thu Duc had raised VND 22,000 billion of bonds. LBO operations are relatively common in the acquisition of real estate projects. Recently, the State Bank has issued a circular restricting credit institutions from providing capital for this operation.
Saigon Development and Investment Joint Stock Company (SDI Corp) has just announced the issuance of 6,575 billion dong of corporate bonds. The issuance completion date is January 4, 2022, the bond maturity date is December 15, 2024 (two-year term).
SDI Corp. is known as the investor of Saigon Binh An urban area project with an area of 117 hectares in An Phu ward, Thu Duc city, Ho Chi Minh City.
Regarding the Saigon Binh An project, last year, three enterprises, Hoang Phu Thinh Company, Hoang Phu Vuong Company and Osaka Garden Company issued a total of VND 15,500 billion in bonds with the purpose of receiving a transfer of a bond. part of the Saigon Binh An urban area project of SDI Corp.
Thus, the mobilized value through the corporate bond channel related to the Saigon Binh An project planned and implemented in the period of 2021 and the first days of 2022 is up to 22,075 billion VND (nearly 1 billion USD). ).
According to our updated data, companies more or less related to Masterise Group's projects in the past year issued a total of VND 37,000 billion of corporate bonds, leading among the corporations that issued the most corporate bonds. best in Vietnam. In the top 4 are the leading real estate corporations mobilizing billions of dollars.
The Saigon Binh An project is a typical example of using leveraged buyout (LBO), ie units that use debt to acquire projects and companies.
Last November, the State Bank issued Circular 16 regulating the purchase/sale of corporate bonds by credit institutions and foreign bank branches. Accordingly, the Circular stipulates that credit institutions will not be allowed to buy corporate bonds in the following cases:
– (i) Corporate bonds issued with the purpose to restructure the debt of the issuing enterprise.
– (ii) Corporate bonds issued for the purpose of contributing capital or buying shares in other enterprises.
– (iii) Corporate bonds are issued for the purpose of increasing the size of working capital.
Score (ii) is that the State Bank wants to limit the ability of banks to buy back bonds that the issuer uses for the purpose of acquiring other entities (LBOs). According to some financial experts, this is a common form of acquiring real estate projects in Vietnam. Besides, debt reversal is also often used by real estate companies.
We would like to contact a case that has caused fever in the real estate industry for more than 1 month recently.
In December 2021, Viet Star Real Estate Investment Company Limited, a member of Tan Hoang Minh Group, won the auction of a land lot in Thu Thiem New Urban Area for VND 24,500 billion (nearly $1.1 billion USD). ). The auction attracted attention because the price was too high, approximately 2.4 billion VND for 1 m2, or literally golden land.
More than 1 billion USD in cash is not a simple number, only a few Vietnamese enterprises including state-owned, listed and FDI companies can make such a profit in a year. In the case of Tan Hoang Minh, owner Do Anh Dung's corporation must find a way to get enough husband before the end of March 2022.
Some views believe that Tan Hoang Minh can consider issuing bonds to raise capital like some big real estate corporations do.
However, in fact, Tan Hoang Minh will not need to do so. Most recently, this group issued an official announcement about voluntary unilateral termination of the contract to buy land at Thu Thiem auction.
After winning the auction, the Group listened to a lot of public opinion and found that such a high winning result could lead to bad consequences. Especially after receiving the opinion of the Minister of Finance at the last extraordinary session of the National Assembly. The Group finds that winning the auction with the above results can lead to disturbances in the real estate business in particular and the economy in general.”
According to: https://theglobal.vn/
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