Facing bitter disappointment with Saigon Glory bonds.

The creditor is left with a bitter pill to swallow.

Ms. P. Lam (Ho Chi Minh City) recounted that she used 5 billion VND to purchase bonds from lot SGL-2020.02 issued by Saigon Glory Co., Ltd. (a subsidiary of Bitexco, hereinafter referred to as Saigon Glory). The purpose of the issuance was to finance The Spirit of Saigon project - a complex of offices, commercial spaces, services, apartments, and a 6-star hotel in the heart of District 1, Ho Chi Minh City, opposite Ben Thanh Market.

However, Ms. Lam stated that she has only received interest payments on the bonds twice, each time over 100 million VND, and has not received any further payments. Even though the maturity date has passed and Saigon Glory is obligated to pay the principal, she has not received any notification from the developer. Not receiving the principal and with the interest "vanished," Ms. Lam said this has significantly impacted her work and family life.

"Saigon Glory previously sent a letter requesting an extension for the bond issue, but I disagreed. However, since then, the company has not responded. The company has not paid the interest, nor has it notified me about the principal. 5 billion VND is a large sum of money for my family; I can overlook the interest, but Saigon Glory must return the principal to me," Ms. Lam said.

Information on bond issues by Saigon Glory Company (Photo taken from meeting minutes).

The bond issue that Ms. Lam purchased is just one of 10 bond issues that Saigon Glory has issued, totaling 10,000 billion VND. Of that amount, 5,000 billion VND matured in June-July of this year, but Saigon Glory has been late in fulfilling its payment obligations for both principal and interest. The remaining 5,000 billion VND will mature in August 2025.

With Saigon Glory's delay in fulfilling its payment obligations, the project is now considering options for handling its collateral assets.

Request for handling of collateral assets.

Representing the bondholders (Tan Viet Securities Joint Stock Company) and the collateral management bank, Techcombank , Mr. Vu Quang Bao - General Director of Saigon Glory - held a recent meeting on October 6th at the headquarters of Tan Viet Securities (Hanoi).

The meeting minutes were agreed upon by Tan Viet Securities and the collateral management bank, while Saigon Glory proposed omitting the content regarding the value of the collateral for the bonds and refused to sign the minutes.

According to the minutes, since June of this year, Techcombank has requested Saigon Glory to re-evaluate the collateral five times but has received no response. Last September, the bank advanced the costs to carry out the re-evaluation.

Specifically, the value of the collateral, which is the future real estate of Tower A (not yet completed), has been revalued at VND 4.653 billion according to the Valuation Certificate dated August 30, 2023, issued by DPV Co., Ltd. (the franchise partner authorized to use the Colliers Investment Management and Real Estate Services Group brand in Vietnam).

The value of the collateral, which is Saigon Glory's capital contribution, has been revalued at negative VND 1,028 billion based on the September 2023 capital contribution valuation report by DSC Securities Joint Stock Company - Ho Chi Minh City branch.

The Spirit of Saigon project has been halted for several months (Photo: Quang Anh).

The bank explained that previously, the value of Tower A according to the valuation certificate from Indochina Valuation was VND 11,551 billion - the value of Tower A after construction was completed as of December 31, 2024, assuming Saigon Glory had sufficient funds to complete the project.

It should be noted that, in its report to the Hanoi Stock Exchange (HNX), Saigon Glory stated that it used 9,915 billion VND out of the 10,000 billion VND in bonds raised to restructure debt, and 85 billion VND to finance the project.

In September of this year, while Tower A (part of the tower complex) had only completed 4 rough floors, Saigon Glory halted construction and has no concrete plans to resume. Furthermore, according to the valuation report on Saigon Glory's equity stake by DSC Securities Company, Saigon Glory's account did not have sufficient funds for construction.

The company has overdue receivables of over VND 19 trillion from third parties, which DSC assesses as unlikely to be recovered. Therefore, DPV Co., Ltd. has valued the unfinished Tower A asset at VND 4,653 billion.

Regarding the assets representing the capital contribution of Saigon Glory Company, the initial collateral value was 7,000 billion VND. As of September 2023, according to an independent assessment by DSC, the company's assets, including projects, cash, and receivables, were deemed insufficient to cover the total debt of the enterprise (approximately 32,000 billion VND).

In particular, the largest loss in Saigon Glory's assets is the receivable from third parties worth over VND 19,000 billion, which is considered unlikely to be fully recovered. Therefore, the bank concluded that the fair value of the owner's equity as of September 1, 2023, was negative VND 1,028 billion under the base scenario.

The scenario regarding Saigon Glory's accounts receivable as assessed by the bank (Photo taken from the meeting minutes dated October 6, 2023).

The minutes state that during the meeting, the bank requested Saigon Glory to hand over the collateral (handing over documents and conducting on-site inspections, signing authorization contracts as required to facilitate the auction of the assets) before October 31, 2023.

According to the bank, if the auction has not taken place or has not been successful, the parties have the right to agree to find a buyer, but the bondholder's approval is required before selling to that buyer. If the auction is successful, Saigon Glory is not entitled to seek a buyer.

According to the terms of the collateral management contract, the proceeds from the sale of the collateral will be used to cover the costs of selling the collateral, taxes, fees, etc., and will then be used to pay the bondholders. Any remaining funds (if any) will be returned to the guarantors.

If the proceeds from the sale of the collateral are still insufficient to cover the bond debt obligations, Saigon Glory is obligated to make further payments as stipulated in Article 307 of the Civil Code.

The Spirit of Saigon project is located in the prime real estate area of ​​District 1, Ho Chi Minh City (Photo: Khong Chiem).

Saigon Glory has scheduled the handover of the collateral handling documents for November 31st.

Saigon Glory Co., Ltd. has sent a written response to the bank and Tan Viet Securities to clarify some issues related to the handover of collateral assets.

Saigon Glory stated that the relevant parties have not acknowledged the value of the collateral, which is the capital contribution in Saigon Glory, as being valued at 0 VND. Therefore, changing the value of this asset to negative 1,028.3 billion VND does not accurately reflect the content of the meeting between the parties. To date, the company has not received any valuation certificates or appraisal reports for the collateral from the bank in any form.

Saigon Glory stated that since the tripartite meeting on October 6th, the bank has yet to clarify the collateral handover process, send the list of personnel responsible for receiving the collateral, or provide the necessary documents requiring approval from the Saigon Glory Board of Members for the handover of collateral.

Saigon Glory stated that it is still in the process of reviewing and categorizing handover documents and is facing difficulties because members of the Board of Directors are not attending meetings when summoned to verify company records.

Therefore, this company proposes postponing the handover of the relevant documents until the aforementioned issues have been clarified by all parties, with the goal of completing it before November 31st, as discussed at the meeting on October 6th.

The company also stated that it will coordinate and make every effort to expedite the handover of the collateral assets for processing in accordance with the provisions of the mortgage contracts and issued bond documents, ensuring the full rights of all parties involved and complying with legal regulations.

In 2020, Saigon Glory Co., Ltd. raised VND 10 trillion through 10 tranches of bonds with maturities of 3-5 years and a minimum interest rate of 11% per annum for the first year. Of this amount, VND 5 trillion matured in June-July 2023 and VND 5 trillion matured in August 2025.

In October 2022, following the controversy surrounding the company's ability to repay bonds in the financial market related to the arrest of the leaders of Van Thinh Phat Group, Saigon Glory committed to repurchasing the entire 10,000 billion VND bond ahead of schedule, in two phases. Phase 1 involved the company repurchasing 5,000 billion VND of bonds no later than June 12, 2023, while Phase 2 involved repurchasing the bonds no later than June 12, 2024.

Last April, Saigon Glory reported to the Hanoi Stock Exchange on the principal and interest payments of its 2022 bonds. In 2022, the company made 40 interest payments on the 10 bond issuances mentioned above, totaling nearly VND 1.11 trillion.

Source: https://dantri.com.vn/kinh-doanh/ngam-trai-dang-voi-trai-phieu-saigon-glory-20231102173147385.htm