Mr. Le Viet Hai wants to establish a new legal entity to restructure Hoa Binh Construction

news

(VnExpress) Hoa Binh Construction Group (HBC) Chairman Le Viet Hai has outlined a plan to establish a strategic financial company to support capital mobilization, affirming that this legal entity will not replace HBC or transfer debt from it.

During the annual general meeting of shareholders on the afternoon of June 26, the leadership of Hoa Binh Construction Group (HBC) dedicated the majority of their time to discussing plans to revive the company.

Alongside a share issuance plan for debt swapping, HBC's leadership announced the establishment of a new legal entity: Hoa Binh Investment Holdings (HBIH). This company will serve as a capital foundation and supporting ecosystem to help HBC overcome its current financial barriers and develop more sustainably.

According to Mr. Nguyen Kinh Luan, Deputy CEO of Investment and International Market Development, the group currently faces difficulties in expanding direct credit limits due to its financial situation following a period of volatility. The creation of a finance-focused subsidiary will help HBC attract domestic and foreign investors, thereby boosting market confidence, improving operating cash flow, and easing debt pressure.

Under the proposed plan, several major shareholders of Hoa Binh Construction will contribute capital to HBIH using the HBC shares they currently hold. This is expected to account for about 20-30% of HBC's total outstanding shares. Upon receiving the capital contribution, HBIH will become a strategic shareholder, directly holding and managing capital in Hoa Binh Construction.

Ông Lê Viết Hải, Chủ tịch Hội đồng quản trị Tập đoàn Xây dựng Hòa Bình, phát biểu tại phiên họp thường niên chiều 26/6. Ảnh: HBC

Mr. Le Viet Hai, Chairman of the Board of Directors of Hoa Binh Construction Group, speaking at the annual meeting on the afternoon of June 26. Photo: HBC

During the Q&A session, several shareholders questioned how financial obligations would be divided between the parent company and Hoa Binh Investment Holdings. Chairman of the Board Le Viet Hai repeatedly emphasized that HBC's current assets and debt obligations would not be transferred to HBIH. In other words, HBC will focus on general contracting and construction, while HBIH will specialize in finance, capital raising, and capital arrangement.

HBC's leadership also stated that the new restructuring plan would not diminish the rights of existing shareholders. "We will not shirk our responsibilities and obligations," said Mr. Nguyen Kinh Luan.

Hoa Binh Construction's shares have been trading below par value since September 2023. About a year later, HBC was delisted from the Ho Chi Minh City Stock Exchange (HoSE) and moved to the UPCoM market. This was due to the enterprise having total accumulated losses that exceeded its actual contributed charter capital, as reflected in its audited 2023 financial statements. Each HBC share closed today at 5,000 VND. The ticker is currently valued below its book value with a P/B ratio of just 0.85x.

At the meeting, shareholders also pressed the group's leadership regarding the share price. "What is the recovery outlook for HBC shares on the stock market going forward?" a shareholder asked.

Mr. Le Viet Hieu, Vice Chairman of the Board of Directors, stated that they cannot fix the price level at which HBC can improve. However, the executive board will find solutions to enhance the enterprise's intrinsic value, improve revenue, reduce costs, restructure finances, and improve cash flow quality... From there, the HBC share price will improve.

In 2025, Hoa Binh Construction recorded revenue of approximately 4,620 billion VND, down 28% year-over-year. Net profit reached nearly 251 billion VND, down 74%. Compared to the plan, the company only completed slightly over half of its revenue target and about 70% of its profit target.

This year, they aim to achieve 10,000 billion VND in revenue, more than double the previous year, while net profit is projected to remain at 250 billion VND. If the target is met, this will be the first year since 2022 that the company returns to a five-digit revenue mark.