HQC swaps 500 billion VND in debt: A solution to cash flow pressure.

Hoang Quan Real Estate plans to issue 50 million shares to swap debt with four major creditors, aiming to restructure its finances amidst negative operating cash flow.

Hoang Quan Real Estate Consulting and Trading Services Joint Stock Company (stock code: HQC) has approved a resolution on a plan to issue 50 million shares through a private placement, equivalent to a value of VND 500 billion, for the purpose of exchanging liabilities. This plan is seen as an effort to rebalance its finances in the context of business operations not yet generating sustainable cash flow.

The plan is expected to be implemented in the 2025-2026 period after receiving approval from the State Securities Commission. The offering price will be set higher than the market price of HQC shares at the time the resolution is passed.

Details of the debt swap plan

According to the plan, 50 million shares will be issued to swap debt for four major creditors, including organizations and individuals related to the company's management. Specifically:

• Hai Phat Investment JSC: Swapped a debt of VND 212 billion to receive 21.2 million shares.
• VDC Construction Design Consulting Co., Ltd.: Swapped a 19 billion VND debt for 1.9 million shares.
• Mr. Truong Anh Tuan (Chairman of the Board of Directors of HQC): Swapping a debt of 236 billion VND to receive 23.6 million shares.
• Ms. Nguyen Thi Dieu Phuong (Mr. Tuan's wife): Exchanged a debt of 33 billion VND for 3.3 million shares.

List of creditors slated for a private placement of shares to swap debt. (Screenshot)

HQC's financial statement notes indicate that loans from related individuals were used for business operations, with a term of approximately 24 months and no interest accrued. Meanwhile, business collaborations with external organizations are subject to interest payments.

Loans from related individuals are used for business operations, have a term of approximately 24 months, and are interest-free. (Screenshot)

Financial picture and cash flow pressure

In terms of business results, for the first nine months of 2025, Hoang Quan Real Estate recorded net revenue of nearly 51 billion VND and after-tax profit of over 18 billion VND. Despite the profitability, the quality of the company's cash flow remains a noteworthy issue.

Specifically, net cash flow from operating activities in the first nine months was negative nearly 306 billion VND, significantly higher than the negative figure for the same period last year. This indicates that cash flow from the company's core business operations has not improved and is under considerable pressure.

Cash flow from core operations of Hoang Quan Real Estate has not yet improved. (Illustrative image)

Impact and prospects

If the share issuance is successful, the new group of creditors will hold nearly 16% of Hoang Quan's charter capital. This solution helps the company reduce its debt burden and improve its financial indicators, especially the debt-to-equity ratio. However, this also means that existing shareholders will have to accept a dilution of their shares.

Overall, the debt swap plan shows that HQC's management is prioritizing strengthening the balance sheet rather than scaling up through financial leverage. This is a cautious step in risk management, but it also reflects the reality that the company has not yet emerged from a difficult cash flow situation.

The long-term effectiveness of this plan will depend on the ability to improve sales revenue and progress in handling inventory. Without addressing these core issues, issuing shares to reduce debt may only be a temporary solution.

Source: https://baolamdong.vn/hqc-hoan-doi-500-ty-dong-no-giai-phap-cho-ap-luc-dong-tien-411022.html