HUD wants to divest from loss-making subsidiary

Housing and Urban Development Corporation (HUD) plans to divest all capital from VINA UIC - a subsidiary that is facing many difficulties in business operations.

HUD to sell loss-making subsidiary

Hanoi Stock Exchange (HNX) has just announced that on August 5, 2025, HUD is expected to organize an auction of the entire lot of more than 1.84 million shares (equivalent to 52.76% of charter capital) of Vietnam Urban Construction Investment Joint Stock Company (VINA UIC). The lot of shares has a starting price of more than 28.4 billion VND, equivalent to 15,400 VND/share.

VINA UIC is a subsidiary of HUD, established in 2007, with the initial goal of implementing investment projects in Laos and neighboring countries. The Company's main business activities are real estate, infrastructure of new urban areas, and industrial parks. In recent years, VINA UIC has researched investment projects in Laos and the provinces of Quang Tri, Thanh Hoa, Hai Duong ; participated in the construction of many construction works of large corporations and investors such as Vingroup, BIM, state agencies, etc.

The company has a charter capital of 35 billion VND, including 5 shareholders. In addition to HUD, the remaining 4 shareholders of VINA UIC are Viet Phuong Investment Group (17.83%), Dong Duong Xanh Development JSC (10.25%), Hanoi Construction Corporation - Hancorp (10.25%) and IDICO Corporation (8.91%).

VINA UIC's first quarter 2025 financial report shows that the Company's total assets as of March 31, 2025 were VND 126.44 billion, mainly allocated to short-term receivables of more than VND 40 billion and inventories of VND 84.8 billion.

The Company's liabilities are approximately VND 106 billion, an increase of more than VND 1 billion compared to the end of 2024.

The Company's charter capital is 35 billion VND; accumulated loss is 14.5 billion VND.

Many challenges surround

Not only facing the above financial difficulties and pressures, VINA UIC is also facing many challenges in business operations, including legal risks.

In the first quarter of 2025, the Company did not generate any revenue from sales and service provision. Previously, VINA UIC's revenue in 2024 dropped significantly, to less than VND 1 billion (compared to VND 30.6 billion in 2023). The main reason was that construction and installation revenue did not arise and real estate revenue decreased sharply. In fact, revenue only came from the handover of land at the Residential Area Project North of Nguyen Hue Street, Dong Ha, Quang Tri . After deducting expenses, VINA UIC's pre-tax profit was VND 6 million.

In 2023, VINA UIC lost nearly 7 billion VND when settling a number of construction projects that suffered losses due to prolonged construction time and increased costs.

Currently, VINA UIC is the investor of two real estate projects, but both projects are stalled due to site clearance problems. Specifically, at the Residential Area Project North of Nguyen Hue Street, Dong Ha Ward, Quang Tri Province, with a scale of 22,001 m2, a part of the project has not yet completed site clearance. The Company has extended the project implementation period to December 18, 2026.

In this project, there are 8 plots of land that have not been handed over in the field and have not been granted land use right certificates. Of which, 1 plot of land has not been cleared; 2 other plots of land have received deposits since 2020, but have not signed a transfer contract. The customer has transferred a deposit of 50% of the value to buy 2 plots of land and the two parties also agreed to refund and compensate if for some reason Party A (VINA UIC) does not agree to sell to Party B (buyer).

Meanwhile, the Investment Project to build a new residential area south of Ke Sat town, Binh Giang district, former Hai Duong province (now Ke Sat commune, Hai Phong city) is also in a deadlock, mainly due to the unfinished site clearance. The investor has not yet received a clean site for construction, leading to the entire construction and business plan being stalled, behind schedule compared to requirements. Current activities are only in preparation, waiting for land allocation.

In addition, at the Dong Son New Urban Area Project (Thanh Hoa), VINA UIC has completed investment and business work since 2011 and audited and finalized the project. However, at present, this project still has 2 plots of land for building adjacent houses that have not completed the procedures for granting land use right certificates to customers. VINA UIC said that the reason is that customers have not cooperated in completing related procedures. VINA UIC still owes HUD interest for late payment of land and infrastructure fees for this project, in the amount of 2.6 billion VND.

At the TT06 Low-rise Housing Construction Investment Project - Block A in the New Urban Area Southwest of Linh Dam Lake (Hanoi), VINA UIC completed the investment and business work in 2015, but has not yet audited or settled the accounts. The notable problem in this project is that the procedures for granting land use right certificates to customers for 2 plots of land for building villas have not been completed because the customers built in violation of regulations. VINA UIC also owes HUD for land and infrastructure of this project, with an amount of 13.5 billion VND (excluding interest).

Given VINA UIC's prolonged financial and legal difficulties, HUD's divestment plan will face many challenges.

Source: https://baodautu.vn/hud-muon-thoai-von-khoi-cong-ty-con-dang-thua-lo-d335961.html