Selling assets to pay debts, 'Boss Duc' still cannot escape difficulties

The enterprise of Doan Nguyen Duc, or Boss Duc as he is known, is still in doubt, though the businessman, once the richest man in Vietnam, has sold many assets to restructure his company.

Hoang Anh Gia Lai Group (HAG) has released the H1 reviewed finance report which showed a net profit, instead of a loss as seen in the previous report.

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Doan Nguyen Duc (left) and Tran Ba Duong

However, HAG is facing many difficulties as a large proportion of the total assets is long-term work in progress with total value of over VND11.4 trillion and inventories worth VND2.3 trillion, while short- and long-term receivables continues to increase to VND10.8 trillion.

Auditors have given their opinions about the possibility of collecting outstanding debts reaching VND7.3 trillion, an increase of 29 percent compared with VND5.67 trillion as of early this year.

Auditors said they could not collect sufficient evidence to determine the ability to recover outstanding debts of nearly VND7.3 trillion. They also stressed that the short-term debt as of June 30 had exceeded the short-term assets of the company.

Prior to that, HAGL in early August was fined and asked to pay tax arrears of VND822 million because of inaccurate tax declarations, which it had made repeatedly.

HAGL’s CEO Vo Truong Son in the last six months sold all the 803,000 HAG shares he held.

As such, Boss Duc’s joy in late 2019 and early 2020 did not last. The price of HAG has turned around and decreased, now hovering around VND4,300 per share.

In 2019, Thaco, the auto manufacturer of Tran Ba Duong, spent VND13 trillion to buy some subsidiaries of HAGL.

Thadi, a subsidiary of Thaco, in charge of agriculture projects, spent VND7.6 trillion to acquire three subsidiaries of HAGL Agrico – Dong Duong Rubber, Trung Nguyen Rubber and Dong Penh Company. The three companies are exploiting 22,500 hectares of agricultural land in Cambodia and Gia Lai.

In addition to the transactions, Thaco also converted bonds into shares, which allowed it to hold 26.29 percent of shares in HAGL Agrico.

HAGL now has high hopes for agricultural production, while Boss Duc places his hopes in billionaire Duong.

In the agricultural sector, the group of shareholders related to Duong includes Thaco which holds 26.3 percent of HNG; and Tran Oanh Production and Trading Co Ltd holding 4.9 percent of HAGL Agrico. Duong holds 3.8 percent.

As such, the shareholders related to Thaco hold 388.05 million HNG shares, or 35.5 percent.

V. Ha