Vinahud Chairman registered to buy 20% of VHD's capital

Mr. Truong Quang Minh - Chairman of the Board of Directors of Vinahud Housing and Urban Development Investment Joint Stock Company (UPCoM: VHD), has just registered to buy nearly 7.7 million VHD shares, equivalent to 20.22% of Vinahud's charter capital, for the purpose of "personal investment".

The transaction is expected to take place from December 2 to December 31, 2024 through negotiation and order matching. If the transaction is successful, Mr. Minh will increase his ownership ratio at Vinahud from 4.51% to 24.74%, equivalent to 9.4 million shares.

According to the price at the end of the trading session on November 29, VHD shares were at 9,000 VND/share, so it is expected that Mr. Minh will spend about 69 billion VND to complete the transaction.

Mr. Truong Quang Minh, born in 1975, has held the position of Chairman of Vinahud since 2022 and is also the founder of R&H Group Corporation.

Mr. Minh’s move to collect VHD shares took place when VHD stock liquidity was low, with an average trading volume of only 1,600 units/session. Previously, VHD stock price had fallen sharply by more than 58% from VND15,000/share at the end of October to VND6,200 on November 26, but suddenly hit the ceiling in recent sessions.

Vinahud is facing serious difficulties in its business operations. In the first 9 months of 2024, its revenue reached only 172 billion VND, down more than 50 billion compared to the same period last year. Financial expenses skyrocketed by 70% to 175 billion VND, causing a loss after tax of 161.5 billion VND, nearly equal to the total loss for the whole year of 2023. This shows that the possibility of the company achieving its annual target of 603 billion VND in revenue and 18.75 billion VND in profit is very low.

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At the end of September 2024, Vinahud recorded total assets of VND 5,100 billion, but mostly relied on debt. Owner's equity was only VND 84.5 billion, while accumulated losses had reached nearly VND 300 billion. The debt/equity ratio increased to 60 times, while debt/equity reached 31 times, three times higher than the previous year.

The asset portfolio mainly focuses on inventories (VND1,620 billion), receivables (VND1,970 billion), and short-term loans (VND1,000 billion). Meanwhile, cash is only VND11 billion, not enough to cover the increasing interest expense. In 9 months, interest expense increased by 57% to VND152.4 billion, but Vinahud only paid VND7.7 billion.

TPBank is currently Vinahud's largest creditor, with an outstanding debt of nearly VND2,000 billion, 23.5 times its equity. This loan was taken out in the first quarter of 2023 to acquire the Tien Phong Flower Village project (Hanoi) and contribute capital to the Grand Mercure Hoi An project. Since then, Vinahud has been deeply in loss.

In addition to TPBank, Vinahud also borrowed 303 billion VND from R&H Group Corporation, a unit directly related to the Tien Phong Flower Village project.

Previously, in early September, Vinahud's extraordinary shareholders' meeting approved the transfer of 100% of its capital contribution at Me Linh Thinh Vuong Company Limited to VNC Construction JSC. The expected transfer price is not less than VND980 billion, the proceeds will be used to pay off the debt at TPBank.