IPA Group (IPA) issues nearly 1,100 billion bonds to raise money to pay off debt

Issued nearly 1.1 trillion VND in unsecured bonds to restructure debt.

IPA Investment Group Joint Stock Company (Code: IPA) has just approved the plan to issue private placement bonds for the second time in 2024. The bond issue has the code IPAH2429003, a term of 5 years, and an interest rate of 9.5% per annum. The maximum value of the issued bonds is VND 1,096 billion.

It is worth noting that, according to the announced purpose of using the funds, the entire amount raised will be used to repay the debts of the three bond issues IPAH2124002, IPAH2124003, and IPAH2225001.

IPA Investment (IPA) is preparing to issue 1 trillion VND in unsecured bonds to raise funds to repay debt (Photo: Provided).

These three tranches of bonds have a total current outstanding value of VND 2,300 billion, and are expected to mature at the end of this year and the beginning of 2025.

Simultaneously, the new bond issue coded IPAH2429003 was issued to restructure debt under the following four conditions: non-convertible, no warrants, not a subordinated debt of the enterprise, and unsecured. This means the risk level of the bond issue is relatively high.

This is not the first time in 2024 that IPA has raised capital through bond issuance. On June 27, 2024, IPA also successfully raised VND 735 billion from bond issue code IPAH2429002.

The company avoided losses in Q2 solely thanks to financial revenue and profits from associated companies.

In terms of business performance, in Q2/2024 the company recorded net revenue of VND 163.5 billion, a 3.3-fold increase compared to the same period last year. However, after-tax profit only reached VND 87.9 billion, a decrease of 42.6% compared to the same period last year.

Gross profit for the period reached VND 86.6 billion, a 4.1-fold increase compared to the previous year. Consequently, the gross profit margin also increased from 42.9% to 53%.

Financial income reached VND 34.7 billion, a decrease of half compared to the same period last year. Conversely, financial expenses increased fourfold, reaching VND 134.9 billion. Selling expenses and administrative expenses also amounted to VND 18 billion, representing a 30.7% increase.

A bright spot in IPA's financial picture comes from its joint venture and associated company business, which recorded revenue of VND 129.1 billion, an increase of 26.3% compared to the same period last year.

Meanwhile, its core business, IPA, is incurring a loss of VND 66.4 billion. The company only avoided a loss due to recognizing profits from financial revenue and investments in associated companies.

IPA's cumulative revenue for the first six months of the year reached VND 1,080 billion, with pre-tax profit reaching VND 425 billion, equivalent to completing 49.2% of the annual profit plan.

Having invested half of his assets in VNDirect, his debt is almost equal to his equity.

Despite less-than-stellar core business results, PA recorded total assets of VND 8,714.6 billion, a slight increase compared to the beginning of the year. However, cash reserves were only VND 60 billion. The company is increasing its financial investments, recording VND 540.8 billion, a 46.4% increase compared to the beginning of the year.

A large proportion of the company's assets consists of trading securities. According to the financial statements, IPA is investing VND 428.7 billion in bonds coded EDI12301 of Trung Nam Energy Investment and Development Joint Stock Company. Following that is VND 48.9 billion in bonds coded CVT122008 of CMC Joint Stock Company (CMG).

In addition, the company's long-term assets amounted to nearly 7,000 billion VND. Of this, 4,372.2 billion VND is invested in VNDirect Securities Company.

Regarding its capital structure, IPA currently records total liabilities of VND 4,486.5 billion. Short-term debt accounts for VND 2,712 billion, and long-term debt accounts for VND 1,425 billion. The total short-term and long-term debt is almost equal to equity.

Source: https://www.congluan.vn/tap-doan-ipa-ipa-phat-hanh-gan-1100-ty-dong-trai-phieu-de-lay-tien-tra-no-post306262.html