The bad debt trading market is getting busy

Agribank, for example, has sold V-Ikon, a building in the eastern part of HCMC, to a private investor. Sources said the new owner plans to spend money to reform the 125 meter high building and turn it into an office building for lease.

More successful deals have been reported. Analysts said there is an undercurrent’ of foreign and domestic investors hunting for properties mortgaged for irrecoverable debts.

The real estate market has heated up again and a new FDI wave has boomed in Vietnam. This explains the establishment of a series of asset management companies recently.

Japanese Samurai Power unexpectedly set foot in Vietnam, pouring $31 million to acquire shares in IDS Equity Holdings.

IDS Equity Holdings is a Vietnamese company which specializes in restructuring and capital investment targeting family-run and state-owned enterprises with potential in production and trade activities.

Samurai Power has many years’ experience in dealing with NPLs in Japan and overseas with the value of up to tens of billions of yen for each asset. The Japanese investor restructures businesses, pumps credit into them and follows M&A strategies to make a profit.

In October 2018, IFC, an arm of the World Bank, announced investment of $65 million in Altus Corporation which aims to build a program on restoring the value of bad assets in Southeast Asia, including Vietnam.

Vietnamese investors have also taken important moves. Ha Do Real Estate has unexpectedly taken over Minh Long Sai Gon Debt Trading Company. Established in 2017, Minh Long, with charter capital of VND120 billion, specializes in trading bad debts.

Prior to that, Tan Hiep Phat, a beverage company, also set up a debt trading company with charter capital of VND100 billion, officially becoming a realtor.

Van Thinh Phat is a well known name in the field. The investor has spent huge amounts of money in the last few years to buy projects in advantageous positions, upgraded them, and transferred them to new investors. 

Bamboo Capital took over a project in district 2, initially developed by Hoan Cau Group, while Hung Thinh Corporation got involved in the restructuring of some projects of BCCI and Thao Loan Real Estate. 

John Sheehan, former CEO of Lehman Brothers, said Vietnam’s bad debt market is relatively attractive and foreign investors are willing to pour money in the market if a legal framework is set up. The price of the debts could be 30-35 cent for every dollar worth of bad debt.

RELATED NEWS

Vietnam’s banks: small capital, low technology, bad debt

Bad debts return to banks