Capitaland Tower's equity was 'blown away', more than 1 year without paying interest on 12,200 billion VND bond

Capitaland Tower's equity is negative 800 billion VND

Recently, the periodic announcement document on the financial situation of Capitaland Tower Company Limited in the first 6 months of 2024 was sent to the Hanoi Stock Exchange.

Of which, the company recorded a loss after tax of VND38.2 billion in the first half of 2024. Compared to the same period last year, when it lost VND175.8 billion, Capitaland Tower's loss decreased by 4.6 times. However, the company's equity was also "blown away", even going negative.

Capitaland Tower is currently negative equity of VND800 billion due to continuous losses. The VND12,200 billion bond debt has pushed the bond debt to equity ratio up tenfold (Photo TL)

Specifically, in the previous period, the owner's equity was still recorded at VND 1,894.2 billion. However, in this reporting period, the owner's equity of Capitaland Tower is recorded at negative VND 799.8 billion. The debt to equity ratio is recorded at negative 22.1 times.

The bond debt to equity ratio has skyrocketed from 0 to 15.3 times. The reason comes from the bond debt of up to VND 12,236 billion mobilized in 2023.

4 bonds worth 12,236 billion VND have not been paid

Capitaland Tower's outstanding bonds have skyrocketed in just over a year due to the mobilization of 4 bond lots with a total debt of VND 12,236 billion as of July 25, 2023. These 4 bond lots have a term of 5 years, maturing on July 25, 2028.

Bond debt of 12,200 billion VND pushes bond debt to equity ratio up.

It is known that the interest rate of these 4 bonds is very low, only 1%/year. In return, bondholders have the right to use the amount corresponding to the unpaid principal and interest to contribute capital to the company. With this agreement, in the past year, Capitaland Tower has not had to pay any interest to bondholders.

However, Capitaland Tower’s capital mobilization activities through bond channels have caused the unit’s financial indicators to decline significantly over the past year. Not to mention the company’s previous capital increases that have also been mentioned quite a lot in the press.

Who is behind Capitaland Tower and Landmark 60 Bason project?

Capitaland Tower Company Limited was established in 2016 with the predecessor Capitaland Vietnam Real Estate Management and Consulting Company Limited. The initial charter capital was only VND4.48 billion (USD200,000) owned 100% by CVH Cayman Holdings Limited.

Just one year later, Capitaland Tower increased its charter capital to nearly VND2,000 billion, equivalent to USD90 million, by merging with Ban Mai Urban Development and Investment Company Limited.

On October 6, 2017, about half a year after merging with Ban Mai, Capitaland Tower was granted investment policy decision No. 5281/QD-UBND by the Ho Chi Minh City People's Committee approving the investment project of the Saigon-Ba Son Complex office, commercial and service building, with a scale of 6,042 m2. This project is known as Landmark 60 Bason.

After many changes in authorized representatives for foreign investors' capital contributions at Capitaland Tower, the above-mentioned 6,042 m2 project was transferred by Capitaland Tower to Ho Chi Minh City Service - Trade Joint Stock Company (Setra Corp). The two parties signed the deposit agreement No. 01/TTDC/STR-CTC on July 10, 2020.

Immediately after signing the deposit agreement with Capitaland Tower, on July 31, 2020, Setra Corp conducted 31 bond issuances with code STRB2023001-031 to raise VND 3,750 billion.

Currently, Capitaland Tower is controlled by businessman Luong Phan Son, who owns 95% of the company's charter capital. This businessman also owns 36% of the charter capital of Thien Phuc Investment, Business and Development JSC and is also a founding shareholder of Thien Bao Phu Real Estate Development JSC.

Source: https://www.congluan.vn/capitaland-tower-von-chu-bi-thoi-bay-hon-1-nam-chua-thanh-toan-lai-lo-trai-phieu-12200-ty-dong-post313277.html