FLC proposed 4 options to extend payment of nearly 1,000 billion VND worth of bonds due at the end of this month but bondholders did not agree.
This information has just been announced by FLC Group Joint Stock Company in the minutes of counting votes to collect bondholders' opinions of bond lot FLCH2123003.
The above bond lot was issued by FLC on December 28, 2021 with a total value of VND 1,150 billion and will mature on December 28, 2023. However, this company bought back VND 152.9 billion before maturity, so the outstanding value of the bond lot is nearly VND 1,000 billion. This is also the total remaining outstanding bond debt of FLC Group.
The company proposed four options, the first three of which proposed extending the bonds for another 24 months at a fixed interest rate of 13% per year. However, bondholders of the FLCH2123003 bond lot did not approve any of the options.
In option 1, FLC said it will continue to implement the FLC Hai Ninh 2 resort villa project (in Quang Binh ) and use revenue from project exploitation and business to repay bond debt.
The company confirmed that all proceeds from the project will be transferred to the company's escrow account to prioritize payments to bondholders. FLC plans to complete legal procedures to put the project into operation from the second quarter of 2025.
According to option 2, FLC proposes to find investors to transfer the project. Similar to option 1, the proceeds from the project sale will also be transferred to a blocked account and prioritized for bond repayment.
With option 3, FLC wants to use the project's real estate when it is eligible to sign a sales contract to offset the bond payment obligation. This is also the way some large real estate developers have done in the past to pay off debt to bondholders. Finally, FLC suggests that in case the above 3 options are not approved, it should propose another option within 90 days from the time of synthesizing bondholders' opinions.
Since the senior leaders got into trouble with the law, FLC has bought back 3 batches of bonds before maturity with a total value of more than 980 billion VND. At the extraordinary meeting in March 2023, FLC leaders said that the company had bought back three-quarters of the bonds issued since 2020 and was one of the businesses with the lowest bond balance in the market at that time.
In early January 2024, FLC will continue to hold an extraordinary meeting to inform about the results of restructuring this enterprise, the 2024 business plan, and dismiss and elect additional members of the Board of Directors.
Mr. Tu
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