Lilama 45.3 has again requested the initiation of bankruptcy proceedings against Duc Long Gia Lai.
Lilama 45.3 Company continues to file a request to initiate bankruptcy proceedings against Duc Long Gia Lai. The request has been accepted by the Gia Lai Provincial People's Court.
Duc Long Gia Lai Group Joint Stock Company (HoSE: DLG) announced that it has received Notice No. 01/PS-TBTA dated July 12th from the Gia Lai Provincial People's Court regarding the acceptance of the application for bankruptcy proceedings at the request of Lilama 45.3 Joint Stock Company.
In a letter sent to the State Securities Commission, the Ho Chi Minh City Stock Exchange, and shareholders, Duc Long Gia Lai stated that the company has incurred a debt to Lilama 45.3 Joint Stock Company.
According to Appellate Judgment No. 03/2023/KDTM-PT dated February 8, 2023, of the Gia Lai Provincial People's Court, the company must pay Lilama 45.3 the principal debt of over 14.7 billion VND and over 2.3 billion VND in late payment interest.
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| Duc Long Gia Lai stated that it has sent a document requesting the Gia Lai Provincial People's Court to reconsider the conditions under which Lilama 45.3 filed its application for bankruptcy proceedings. |
In July 2023, Lilama 45.3 filed a request for bankruptcy proceedings, and the Gia Lai Provincial People's Court issued Decision No. 01/2023/QD-MTTPS to initiate bankruptcy proceedings. The company has requested the Da Nang High People's Court to review this Decision.
The High People's Court in Da Nang reviewed the company's operations, found that the company was not insolvent and had shown good faith and commitment to repay its debt to Lilama 45.3, and therefore issued a decision to overturn the Gia Lai Provincial People's Court's decision to initiate bankruptcy proceedings.
Eight months have passed since the Da Nang High People's Court issued its decision to overturn the bankruptcy proceedings, and the company has continued to operate normally and has also shown goodwill by repaying its debt to Lilama 45.3 as committed.
Specifically, in the first and second quarters of 2024, Duc Long Gia Lai paid Lilama 45.3 1 billion VND each quarter. To date, the total amount paid to Lilama 45.3 is 6 billion VND. Most recently, on June 27th, the company paid 350 million VND.
Citing Clause 1, Article 5 of the 2014 Bankruptcy Law, Duc Long Gia Lai stated that it did not violate the regulation that "Unsecured creditors and partially secured creditors have the right to file a petition for bankruptcy proceedings when, after 3 months from the due date of the debt, the enterprise or cooperative fails to fulfill its payment obligations."
The company stated that it had sent a written request to the Gia Lai Provincial People's Court to review the conditions under which Lilama 45.3 filed its application for bankruptcy proceedings, in order to reject the application and revoke the Notice of Acceptance of the Application for Bankruptcy Proceedings.
In another development, on July 15th, the Board of Directors of Duc Long Gia Lai passed a resolution to sell its entire 97.73% stake (equivalent to an investment of VND 249 billion) in Mass Noble Investments Limited.
The company authorizes the General Director to find a valuation firm to appraise the current value of this investment, and to find a partner to transfer it to, provided the price is not lower than the par value and the group's ownership stake in Mass Noble.
Mass Noble primarily operates in the manufacturing of high-tech telecommunications and electronic components and equipment, with its factory located in Guangdong (China). This company plays a significant role in the business results of Duc Long Gia Lai.
According to its 2023 annual report, Mass Noble recorded revenue of over VND 573 billion, contributing 51% to the group's total revenue. However, Mass Noble reported a pre-tax loss of VND 78 billion, compared to a loss of over VND 113 billion in the same period. Total assets at the end of last year reached over VND 412 billion, a slight decrease compared to VND 456 billion at the beginning of the period.
Duc Long Gia Lai announced its plan to divest from Mass Noble amidst significant difficulties for the group, having incurred losses for two consecutive years. Specifically, the company lost 578 billion VND in 2022 and 1,197 billion VND in 2023. The auditors also expressed doubts about the company's ability to continue operating.
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