Without the government’s help, HAGL will sell 20,000 hectares of rubber for Chinese partner
If not receive support from the government for debt reconstruction, HAGL will sell 20,000 hectares of rubber for Chinese partner, said Doan Nguyen Duc.
Morning September 15th, HAGL Agrico (HNG) has held annual shareholder’s meetings to adopt business plan in 2016.
An expected loss of VND 559 billion in 2016
Accordingly, the company expects to gain VND net revenue of 4,309 billion, gross profit of VND 450 billion and loss of VND 559 billion. A loss of VND 559 billion during 2016 is also a loss recognized in the first 6 months. Thus, HNG expects no additional loss during the rest of the year.
Mr. Nguyen Xuan Thang, General Director of HNG said, the company plans to has sales of 100,000 beef cows, resulting in revenues of about VND 3,063 billion, gross profit of VND 345 billion. Revenues from dairy herds is projected VND 302 billion.
In terms of cultivation, the company now has 31,477 tonnes of sugar sales, earning VND 370 billion and VND 112 billion in gross profit. In 2016, 4,403 hectares of rubber is expected to obtain 5,265 tonnes of dry latex, bringing a profit of around VND 127 billion and VND 59 billion loss. Besides, corn sales reaches 26,927 tonnes with revenues of VND 136 billion and VND 69 billion in gross profit.
About investment plans, HNG said it would continue to take care of rubber trees, palm oil and plan to grow fruit trees in Vietnam, Laos and Combodia to make full use of the company’s redundant land.
To issue shares for debt payments
One of central issues of the meeting is the meeting is the situation of debt restricting. Recently, HNG has no payment of loan principal and interest to creditors. In financial reports of the first 6 months, Ernst & Young noted the continuous operation of HND if debt restructuring is not implemented.
Currently, HAGL Agrico borrowed VND 8,168 billion, owning the parent company VND 10,327 billion. Current assets exceed short-term loans, causing financial situation more difficult.
The company continues working with creditors to restructure the debt, including the introduction of a reasonable interest rate, extension of duration of loan principal and interest. However, the debt restructuring plan has not been approved by the government.
Thang said, in the last 6 months, HNG will re-evaluate the property, including the liquidation of assets, despite the tradeoff of advantages in the future.
According to the submission to the shareholders, HNG will issue 110 million shares at the expected price from VND 6,400/share, in order to generate funds for capital restructuring and payment of VND 700 billion to Temasek (Singapore) (HNG currently owes VND 1,100 billion).
Without the government’s support, it will sell 20,000 hectares of rubber
Doan Nguyen Duc said, HNG is still awaiting the government’s decision for the company’s debt restructuring plan. In case the government does not “save”, HNG will sell 20,000 hectares of rubber. There has been some big partners from China wishing to buy with VND 8,000 billion.
“If sell 20,000 hectares of rubber, the debt situation of HAGL Agrico will be improved significantly and HAGL still has about 60,000 hectares of land. This is a very large area that many corporations have desires for”, Doan Nguyen Duc said.
Explaining for the difficult situation of the company, Duc said the orientation is not wrong but there are some objectives factors, that is the decrease of rubber prices. Despite of imbalanced cash flow, the company is not “dead”. If a part of rubber and sugar is sold, debt will be paid off./.