Egroup will prioritize debt repayment for elderly, sick, or financially disadvantaged investors, starting in July.
This information was provided by Mr. Nguyen Ngoc Thuy, Chairman of Egroup, at an investor meeting on the evening of June 6th. Mr. Thuy also repeatedly emphasized that Egroup can only develop after paying off all its debts.
Starting in July, Mr. Thuy said Egroup employees would proactively contact elderly investors, those who are ill or whose families are facing difficulties, to come to the company to settle outstanding debts.
Both parties will determine the principal amount, interest on the contract, accrued debt, and previously paid amounts. Depending on actual financial capacity, the company will consider which investors will be paid first. Egroup declined to specify the number of investors expected to be eligible for this payment, only stating that this will be the company's top priority in the coming period.
Regarding other investors, Mr. Thuy stated that Egroup is committed to two solutions. Firstly, to wait for debt repayment according to the company's recovery plan, expected to take 3-4 years. Secondly, to consider debt swaps for real estate, English language courses, investment packages for English language center franchises, household appliances, and other products to be announced later.
During the debt settlement process, Mr. Thuy's company will also ask investors to reduce past interest payments and consider suspending future interest accrual. "I'm asking investors on a voluntary basis to share and cooperate so that the company can overcome these difficulties," the company leader said.
Mr. Nguyen Ngoc Thuy said he did not believe Egroup was in its current crisis.
An investor in Hanoi, who has invested nearly one billion VND in the Egroup ecosystem, said he agrees with the plan to prioritize payments to those in difficult circumstances. However, he questioned the transparency of the approval process because the company did not provide clear criteria.
Another investor in Hanoi, despite suspecting he was eligible for early repayment, remained worried because his total investment was only slightly over 100 million VND. "I'm a small-scale investor, with limited resources, and I'm afraid the company won't care about me and will prioritize paying off other people's debts first," he said.
During the recovery process, the company's management said it would seek additional financial resources from accessing investment funds, which could then swap debt for individual investors. According to Mr. Thuy, accessing funds began in 2019 but was interrupted due to the pandemic. "I believe that Egroup's ability to recover from the crisis will be very attractive in their eyes," he shared.
Mr. Thuy said that investment funds are often more interested in the value and potential of the business than the story of how much debt the business is in. For the education chain, the valuation is usually based on the formula EBITDA (profit before tax, depreciation and interest) multiplied by a factor, usually 10-12 times EBITDA. However, funds will be concerned about the consensus and reaction of investors on the restructuring plan and the company needs time to convince them on this issue.
Currently, Mr. Thuy stated that the company has passed its most difficult phase. To date, the core business of Apax Leaders/Apax English has expanded with the opening of a new branch in Tu Son. According to plan, next week this English language teaching chain will open another branch in Kim Lien, followed by locations in Ha Tinh , Linh Dam, and Gardenia. After all key locations in the North reopen, the company will focus on the Southern market.
"Previously, I often received a very difficult question to answer: Can Egroup revive its core Apax business? At that time, I could only say that we would try our best, but now I am confident that the restructuring has been successful in the initial phase and will continue in the future," Mr. Thuy said.
On the stock market, shares of Apax Holdings Investment Joint Stock Company - the only listed subsidiary in the Egroup ecosystem - have been moved from the controlled category to the restricted trading category since mid-May. The Ho Chi Minh City Stock Exchange (HoSE) stated that the reason was the company's delay in submitting its audited financial statements for 2022 by more than 45 days.
Previously, Apax Holdings was also reprimanded for late submission of its annual report. In addition, IBC has yet to publish its first-quarter financial report. Since the beginning of the year, IBC's share price has fallen from 3,600 VND to 2,540 VND per unit at the close of trading on June 7th.
In early April, this stock experienced a price surge after Egroup announced the successful restructuring of Apax Leaders in the first phase, with IBC reaching 3,100 VND per share. Since trading became restricted, the stock price has hovered around 2,500 VND per unit; however, liquidity has not decreased significantly compared to the beginning of the year.
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