Property trader ITA in debt

Nov 26th at 15:55

26-11-2013 15:55:42+07:00

Tan Tao Investment and Industry Corporation - ITA is struggling with its credit commitments, with $85 million owed to 10 credit institutions.

Almost 90 per cent of its loans are long-term at around 13 per cent per annum and are backed up by land use rights and associated assets.

Maritime Bank is ITA’s biggest creditor having laid out $10.22 million at 15.5 per cent per year. The loans are secured by land in Tan Duc Industrial Park.

BIDV has lent the company $19.7 million, based on collateral such as land use rights, company shares, and apartments.

Other long-term mortgages included PVcomBank (formerly Western Bank), Indovina, Vietnam Development Bank, HDBank, and Agribank.

Another $7.99 million is short- term loan from Navibank and Agribank

However, this year, the company’s cost of capital has gone down to $3.29 million as interest rates have fallen, saving ITA, equal to a 22 per cent drop.

The company is also in debt to state-owned Ho Chi Minh City Finance and Investment Company (HFIC), Southern Engineering & Informatics Investment Corporation, and Vinh Long Development and Investment Fund with loans totalling $2.8 million.

ITA has reported a 17 per cent decrease in profit for the first nine months of this year, blaming its poor performance on the ailing real estate market.

By the end of the third quarter, Tan Tao (traded as ITA) showed after-tax profits of $0.66 million, a significant drop against last year.

ITA general director Thai Van Men said the company’s business is focused on leasing and selling properties with completed infrastructure and production facilities. “The gloomy real estate market is making it very difficult for us to invest and expand, and this is the main reason for our drop in profits,” he said.

In the first nine months, ITA’s subsidiaries were mostly to blame for its losses, whereas last year they contributed $2.45 million in revenues.

The company’s revenues from sales and services so far this year have fallen 37.5 per cent to $14.26 million. Meanwhile its inventories rose by 7 per cent and are valued at around $142.6 million.

vir