Vietnam firm to sell 20,000ha rubber project to China if debt bailout plan fails
Vietnam firm to sell 20,000ha rubber project to China if debt bailout plan fails
A Vietnamese multi-sector conglomerate plagued by financial woes over its loss-making agricultural arm has announced that it may sell nearly half of its massive rubber plantation to Chinese partners in the event its proposed debt restructuring plan falls though.
Hoang Anh Gia Lai Group has received support from the State Bank of Vietnam on its proposed bail out solutions, but the plan still needs the final approval from the government.
“If our debt restructuring plan is rejected, we may have to sell 20,000 hectares from our 40,000 hectare rubber plantation in Laos,” Hoang Anh Gia Lai chairman Doan Nguyen Duc admitted.
Speaking to Tuoi Tre (Youth) newspaper after the company’s annual shareholder meeting on Thursday, Duc said that some Chinese partners have shown interest in buying selected areas of the rubber plantation.
The rubber plantation in Laos is operated by Hoang Anh Gia Lai agricultural arm, Agrico, which is also the main cause of the company’s massive debts.
As of the end of 2015, Hoang Anh Gia Lai owed more than VND31 trillion (US$1.38 billion) in debt, with short- and long-term loans accounting for VND27.09 trillion ($1.21 billion).
Debts accrued by Agrico alone made up more than 50 percent of the total.
Hoang Anh Gia Lai is due to repay VND8.29 trillion ($370 million) by the end of this year.
In May, the conglomerate announced a plan to restructure its debt, including extending the maturity for part of the debt.
“We did not ask to have the interest on our debt exempted or reduced so there will be no loss for the state budget,” Duc asserted with Tuoi Tre.
“We are still waiting to see if the plan is approved or rejected to decide whether we should sell part of our rubber project [in Laos].”
The chairman also admitted that he is in talks to sell his sugar plant in Laos, even though Hoang Anh Gia Lai has plans to focus on agriculture and scale down on other sectors.
The firm currently invests in real estate, rubber, sugarcane,cattle and football – running a top-flight football club of the same name and operating a training academy backed by English powerhouse football club Arsenal.
