Continuously losing, TDC holds billions of VND in debt

Accordingly, the Board of Directors of Binh Duong Business and Development Joint Stock Company (HoSE: TDC) recently approved a resolution to borrow capital from BIDV Bank's Binh Duong branch to supplement working capital for regular business production activities and investment in projects and business plans of Binh Duong Business and Development Joint Stock Company.

The short-term loan and guarantee limit   for the 2024 - 2025 period is 700 billion VND. The purpose of using the loan is to supplement working capital for the company's business production activities for the 2024 - 2025 period. The loan term is 12 months, with an interest rate as per the bank's regulations.

According to the resolution, the Board of Directors allows TDC to use assets (tangible fixed assets, intangible assets, stocks, bonds, deposits, and other types of assets...) owned, used, and legally managed by TDC or to receive third-party secured assets to mortgage, pledge at BIDV Bank - Binh Duong Branch to fulfill the repayment obligations (loans and guarantees).

The resolution also states that if TDC fails to meet its loan repayment or guarantee obligations and other obligations causing damage to the bank, the 2024-2029 term Board of Directors of TDC agrees to authorize the bank's representative to have full authority to handle all the company's assets to recover loan debts, guarantees, and compensate the bank for damages.

TDC continues its borrowing plan amidst its ongoing debt burden. Specifically, by the end of Q1/2024, the company's total liabilities amounted to over 2,777 billion VND, with short-term and long-term financial debt exceeding 1,576 billion VND, accounting for 57% of the company's total debt. Of this short-term debt, over 732 billion VND are short-term loans from BIDV.

According to TDC, its parent company, Becamex IDC Corporation, and other companies within the group have committed to financially supporting TDC by guaranteeing loans and not requiring the company to repay trade debts until it is capable of doing so.

Not only bearing high debts exceeding short-term assets, which could affect the company's continuous operations, but the company's business results are also consistently in a state of loss.

According to the financial report for Q1/2024, TDC recorded a net revenue of over 119 billion VND, a 15% decrease compared to the same period. The company reported a post-tax loss of over 24 billion VND, compared to a loss of over 40 billion VND in the same period last year. This marks the company's sixth consecutive quarter of losses since Q4/2022.

Due to continuous losses, the company's undistributed post-tax profit by the end of 2023 was negative, which is also why TDC's shares were put under warning status by HoSE starting from April 10, 2024.

To address the warning status, TDC's leadership stated that the company has devised a loss compensation plan for 2024 and 2025. The 2024 compensation plan is based on the sale of unfinished projects.

Specifically, the company continues to offer land use rights for sale in Chon Thanh, Binh Phuoc province, with an expected revenue of about 100 billion VND; launch parts of the Uni Town Project Phase 1 and parts of the Uni Town Project Phase 2 with an expected revenue of about 345 billion VND; launch the TDC Plaza Project with an expected revenue of about 630 billion VND;

The profit after tax for 2024 from the Pho Song Cam Hai Phong project is expected to be about 117 billion VND (this project is a joint investment between TDC and Vsip Hai Phong Co., Ltd., implemented in 2023).

In addition, Becamex IDC Corporation and other companies within the group will support financial extensions for the group by guaranteeing loans and not requiring the group to repay trade debts until the group is capable of doing so.

Furthermore, the company is making efforts to overcome financial difficulties and develop its business to gradually offset the accumulated losses from previous years.