Hoa Binh Group approves debt-for-equity share issue

For creditors, the deal offers a way to recover exposure through equity rather than wait for cash payments from a heavily levered borrower. For HBC, it eases short-term pressure on working capital and helps reduce the risk that persistent liabilities continue to choke operations.

The transaction follows a previous conversion round completed on June 28, when HBC issued 73.08 million shares to swap nearly 731 billion dong of debt. Together, the two rounds have turned almost 1.2 trillion dong of obligations into equity over the past two years, making debt conversion one of the group’s main survival tools.

That urgency is evident in the company’s latest accounts. As of June 30, HBC had total assets of 16.886 trillion dong but liabilities of 14.867 trillion dong, equal to 88% of assets, while accumulated losses stood at nearly 2.026 trillion dong, or about 58% of charter capital.

The operating picture has improved only partially. First-half revenue nearly doubled to 3.268 trillion dong, but after-tax profit fell more than 19% to just over 41 billion dong, leaving the company at about 33% of its full-year revenue target and less than 17% of its profit plan.

Investors will watch whether the latest swap buys HBC enough breathing room to sustain construction activity without further diluting shareholders. The stock’s gap between the 10,000-dong issuance price and the 3,600-dong market level suggests the market still expects more pain, even as management leans on conversion deals to keep the company afloat.