There are 58 real estate companies listed on the stock exchange that have a total debt of nearly VND332 trillion ($14.6 billion).
58 listed real estate firms amass stellar debts
After great improvements, Hoang Anh Gia Lai JSC (code: HAG) recorded VND371.6 billion ($16.4 million) in after-tax profit but financial indicators are still not encouraging. At the end of 2017, interest payments for debts reached VND1.404 trillion ($61.9 million).
The company owes to TPBank VND321.5 billion ($14.2 million), BIDV VND172 billion ($7.6 million), LaoVietBank VND120 billion ($5.3 million), Sacombank in Cambodia VND80.7 billion ($3.6 million), Bank for Investment and Development of Cambodia Plc. (BIDC) VND34.6 billion ($1.5 million), and TPBank VND1.19 trillion ($52.4 million) which is payable in the next eight years.
Ernst & Young Vietnam Co., Ltd (E&Y), the auditor of Hoang Anh Gia Lai ‘s financial report 2017, said: “The short-term debts of Hoang Anh Gia Lai were double of the $157 million worth of short-term property assets.”
“Heavy debt” is not only a curse of Hoang Anh Gia Lai, as it is a widespread ailment among real estate companies. A survey of baogiaothong.vn showed that the bigger the companies, the more debts they own.
Other real estate companies owing hundreds of millions of dollars are Quoc Cuong Gia Lai JSC with VND7.412 trillion ($326.5 million), Phat Dat Real Estate Corporation with VND7.115 trillion ($313.4 million), KinhBac City Development Holding Corporation with VND6.741 trillion ($297 million), Becamex IJC with VND6.338 trillion ($279.2 million), Saigon Commerce Real Estate JSC with VND6.070 trillion ($267.4 million), and Nam Long Investment JSC with VND4.198 trillion ($185 million).
The deeper the debts, the greater the inventory
According to baogiaothong.vn, the total debts of the 58 real estate firms listed on the stock exchanges are nearly VND332 trillion ($14.6 billion), which is double their total equity.
The debts of almost all of these firms exceed their equity, while the larger debts come with larger inventories.
Notably, many firms have much more short-term debts than short-term assets, which means it is very hard for them to keep ahead of debt payments.
http://www.vir.com.vn/the-bigger-the-real-estate-company-the-larger-the-debts-58549.html
