Hoang Anh Gia Lai (HAG) is suspected of operating capacity by auditors

Auditors doubt Hoang Anh Gia Lai 's (HAG) ability to continue operations

Hoang Anh Gia Lai Joint Stock Company (HAG Code) has just announced its audited semi-annual financial statements for 2023. Notably, the auditor's opinion doubts the unit's ability to continue operating.

Specifically, HAG's consolidated revenue for the first half of the year reached VND3,144.9 billion, a slight decrease compared to the same period last year. Financial expenses and business management expenses after the audit both increased, causing the company's after-tax profit to decrease by about 5% compared to before the audit, to VND385 billion.

Hoang Anh Gia Lai's nearly 3 trillion asset is suspected by auditors of its ability to continue operating. Image 1 — Hoang Anh Gia Lai (HAG) is suspected by auditors of its ability to continue operating due to accumulated losses of nearly 3,000 billion (Photo TL)

HAG's audited revenue results increased by 55% over the same period, after-tax profit decreased by 26% compared to the first half of 2023.

Notably, in the semi-annual consolidated financial statements, the auditors emphasized the accumulated loss of VND2,959.4 billion of Hoang Anh Gia Lai. Along with the fact that the group's short-term debt exceeded its short-term assets by VND2,004 billion. According to the auditors' opinion, the above shows the existence of a material uncertainty that may lead to doubts about the ability of Hoang Anh Gia Lai Group to continue its operations.

Hoang Anh Gia Lai mobilizes additional 1,300 billion to pay debt

Previously, on August 10, 2023, Hoang Anh Gia Lai finalized the list of shareholders to collect written opinions on the content of issuing individual shares to supplement charter capital for the company's operations.

With this private share issuance plan, Hoang Anh Gia Lai plans to issue 130 million private shares at a price of VND10,000/share. The target audience will be professional securities investors. The implementation time will be immediately after the State Securities Commission approves the issuance plan.

It is expected that HAG will collect 1,300 billion VND from this issuance if successful. Of which, the company will use 323 billion VND to pay the principal and interest of the HAG 2012,300 bond lot that the company issued since June 18, 2012.

The company will also use VND277 billion to restructure its loans at Tien Phong Commercial Joint Stock Bank. This is a loan for Lo Pang Livestock Joint Stock Company, one of HAG's subsidiaries.

HAG plans to use the remaining VND 700 billion in mobilized capital to restructure the debt of Hung Thang Loi Gia Lai Company Limited, which is also a subsidiary of Hoang Anh Gia Lai, and plays a role in managing other subsidiaries in the ecosystem.

Doubts about the possibility of another failure of the 1,300 billion VND capital mobilization

In 2023, on January 17, 2023, Hoang Anh Gia Lai also registered to issue 161.9 million shares privately and was approved by the State Securities Commission. At that time, the expected issuance price was VND 10,500/share.

Initially, the expected amount of money raised from this issuance was VND1,700 billion and was allocated by HAG as capital contribution to two subsidiaries, Hung Thang Loi Gia Lai and Lo Pang Livestock JSC. The capital contribution was made in the form of a loan. In addition, the company will also use part of the money to pay off maturing bond debts.

However, for many consecutive months since the registration date, HAG shares have continuously maintained a price below the par value of VND 10,000/share. Therefore, offering newly issued shares at a price of VND 10,500/share is impossible. This share offering failed on April 17, 2023.

Currently, in the trading session on August 31, 2023, HAG shares are being traded at VND 9,180/share, still much lower than the offering price of VND 10,000/share. Thus, there is still a risk that this issuance will fail for the same reason as the first time.

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