VietNamNet Bridge - Financial problems have forced Doan Nguyen Duc, president of Hoang Anh Gia Lai Group, known as one of the most influential businessmen, to mortgage his shares, cows and football academy to get loans.

Doan Nguyen Duc, president of Hoang Anh Gia Lai Group

Hoang Anh Gia Lai’s audited finance report showed that the group’s short-term loans had reached VND3.2 trillion by December 31, 2015, an increase of VND1.857 trillion, or 138 percent compared to the end of 2014.

In order to get the bank loans, Hoang Anh Gia Lai  had to mortgage its valuable asset.

BIDV Gia Lai Branch had provided VND1.896 trillion in total by that time, including the loan worth VND603 billion with the interest rates of 5.05-10.5 percent per annum. In order to get that loan, Hoang Anh Gia Lai had to mortgage Hoang Anh Gia Lai Football Academy complex, the 1,194.74 hectare rubber field in Gia Lai province and 30 apartments in Da Nang City.

In order to get the loan worth VND761 billion with the interest rates of 5.05-10 percent, the group had to mortgage a part of the rubber field, 23 apartments and 23 stories of the Bau Thac Gian commercial area in Da Nang City.

Financial problems have forced Doan Nguyen Duc, president of Hoang Anh Gia Lai Group, known as one of the most influential businessmen, to mortgage his shares, cows and football academy to get loans.

It has also mortgaged Hoang Anh Gia Lai Medical University’s Hospital, the assets to be created from the cow farming project and the imported cows worth $47.6 million for other short-term loans. Duc’s tens of millions of Hoang Anh Gia Lai shares have also become the collateral for loans.

Regarding long-term loans, the figure had reached VND9.746 trillion by the end of 2015, an increase of VND3.639 trillion, or 60 percent compared with the end of 2014. This includes VND1.194 trillion worth of due debts.

A part of collateral for the long term loans is the 20 million shares owned by Hoang Anh Gia Lai Group. However, the shares were sold by ACB, one of the lenders, in March 2016.

At present, Eximbank’s Exchange is the biggest creditor of Hoang Anh Gia Lai, which has provided VND3.156 trillion worth of long term loans. To get the loans, the group has mortgaged the Hoang Anh Gia Lai shopping mall in Myanmar, accounts receivable, shares and other assets.

The high debt has eaten into Hoang Anh Gia Lai’s profit. In 2015 alone, it had to spend VND1.079 trillion on the interest for loans, an increase of VND474 billion, or 78 percent if compared with 2014. Meanwhile, the post-tax profit in 2015 was lower than the interest for loans, at VND602 billion.

Big debts have put Hoang Anh Gia Lai under pressure. A representative of the group said the group was working with creditors and state agencies on the debt resettlement.

V. Ha