Falling out: Thaco subsidiary to no longer invest in HAGL Agrico (HNG)
Automaker Thaco has scrapped plans to invest further in HAGL Agrico due to the latter’s delays in transferring lands following earlier deals.
A banana farm of HAGL Agrico. Photo courtesy of HAGL Agrico.
HAGL Agrico has had to call off a private placement of over 741 million HNG shares to Thagrico, a subsidiary of Thaco, for over VND7.4 trillion ($321.92 million).
It follows Thagrico’s announcement on July 12 that it would stop investing in the agricultural company.
Thagrico said one of the reasons for its decision is HAGL Agrico’s failure to hand over land documents related to three of its subsidiaries it sold in 2019.
Last year, Thagrico acquired four more subsidiaries of HAGL Agrico, and again the land documents were not transferred.
The lands are mortgaged to BIDV for loans.
"Thagrico has invested in infrastructure and started growing plants on the lands, but without the documents to prove its ownership, it cannot mobilize more funds for the purpose."
It said another reason is that HAGL, the parent of HAGL Agrico, has been selling its shares in the company to reduce its ownership from 16.34 percent to 11.43 percent though HAGL shareholders require it to retain a 25.24 percent stake.
The selling has brought HNG of HAGL Agrico down to VND8,250, below face value of VND10,000.