Hodeco (HDC) wants to mobilize nearly 500 billion VND in convertible bonds to pay off debt

Hodeco approved the plan to issue bonds code HDC42501 to existing shareholders, these are bonds convertible into common shares, unsecured, without warrants.

The expected allocation ratio is 35,671:1,000, meaning that shareholders owning 35,671 shares will have the right to buy 1,000 more bonds (par value 100,000 VND/bond) and are expected to mobilize a total of nearly 500 billion VND.

The bonds are expected to have a term of 2 years, a fixed interest rate of 10%/year, are unsecured and do not come with warrants. The offering will take place in 2025, immediately after being approved by the State Securities Commission.

The Industrial and Commercial Bank Securities Company is the advisory unit and issuing agent. The amount raised is expected to be used to pay off loans at the bank, helping to reduce debt pressure.

As of the end of the second quarter of 2025, Hodeco's outstanding loans reached VND 1,430 billion, equivalent to 61% of equity.

The expected conversion price is 10,000 VND/share and the amount of money raised, Hodeco plans to use 46.9 billion VND to pay principal and interest on the loan to Vietnam Joint Stock Commercial Bank for Investment and Development - Vung Tau Branch; 172.9 billion VND to pay principal and interest on the loan to Vietnam Joint Stock Commercial Bank for Prosperity and Development - Vung Tau Branch; 50.9 billion VND to pay principal and interest on the loan to Tien Phong Joint Stock Commercial Bank - Ho Chi Minh City Branch; 132 billion VND to pay principal and interest on the loan to Foreign Trade Joint Stock Commercial Bank - Vung Tau Branch; 91.6 billion VND to pay principal and interest on the loan to Vietnam Joint Stock Commercial Bank - Vung Tau Branch; and the remaining 5.7 billion VND to pay principal and interest on the loan to Vietnam Joint Stock Commercial Bank for Industry and Trade - Ba Ria - Vung Tau Branch.

Previously, Hodeco announced documents for the 2025 Extraordinary General Meeting of Shareholders, which is scheduled to be held on September 30 in Ho Chi Minh City.

Hodeco submitted to shareholders an adjustment to the 2024 profit distribution plan. The Board of Directors proposed a plan to issue shares to increase capital from equity to shareholders at a rate of 12% in shares.

Accordingly, the Company will issue more than 21.4 million shares to increase its charter capital from VND 1,783.5 billion to VND 1,997.6 billion and will do so after receiving approval from the competent authority.

Hodeco also submitted to shareholders the cancellation of the content of repatriating the development investment fund into undistributed profit after tax to pay dividends to shareholders approved at the 2025 Annual General Meeting of Shareholders.

Explaining the cancellation of the approved content, Hodeco said that after working with State management agencies, the source for dividend distribution must be based on undistributed profit after tax according to the 2024 audited financial report. The return of the development investment fund to undistributed profit after tax to pay dividends to shareholders is not appropriate.

It is not appropriate to return the development investment fund to undistributed profit after tax to pay dividends to shareholders.

The Company proposes to shareholders to cancel the plan to issue shares to pay dividends in 2024 because the after-tax profit of the 2024 audited financial report is not enough to pay dividends at the rate of 12%. In addition, the Company cannot repatriate the development investment fund into the undistributed after-tax profit to pay dividends to shareholders.

Instead, the Board of Directors will submit to the General Meeting of Shareholders for approval the issuance of shares to existing shareholders from equity capital.

Source: https://baovanhoa.vn/kinh-te/hodeco-hdc-muon-huy-dong-gan-500-ti-dong-trai-phieu-chuyen-doi-de-tra-no-168879.html