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Banks aggressively lower debt selling prices

Recently, bank Joint Stock Commercial Bank for Investment and Development of Vietnam – BIDV (HoSE: BID) announced the auction of debts of two construction enterprises under credit contracts at Bach Giang Housing and Construction Company Limited and Bach Giang Construction Company Limited. Building Trade Cao Nguyen.

BIDV has 8 times to sell debt at Bach Giang Company and Cao Nguyen Company but has not been successful.

According to two credit contracts, the outstanding balance of Bach Giang company as of March 11 is 253.2 billion VND, of which the principal balance is 97.3 billion VND, interest debt is 155.6 billion VND. copper. With the Cao Nguyen company, BID said that as of September 30, 2021, the temporary outstanding balance is more than VND 262 billion, of which the principal is VND 100.6 billion, and the interest debt is VND 161.3 billion. The collateral for the above debt consists of 3 components.

The first is the entire value of land use rights (including the value of compensation, site clearance, infrastructure investment and other investment costs) at Land I, II, III and IV belonging to the company. Bach Giang belongs to the Residential Area Project of Quarter 4, Phuoc Long A Ward, Thu Duc City, Ho Chi Minh City.

Second is the entire value of land use rights at land plots I5 and I7 belonging to Bach Giang Company according to the 2014 land allocation decision of the People’s Committee of Ho Chi Minh City.

Tuesday is the entire interest of Cao Nguyen Company formed from borrowed capital and own capital in the joint venture investment – business project Investment in internal technical infrastructure of residential area I5 and I7 KDC Quarter 4, Phuoc Long A ward, Thu Duc city (former district 9) of Bach Giang Company.

BID offers a starting price for the above debt of VND 252.8 billion, excluding value added tax. The deposit is 10% of the starting price, the auction step is 100 million VND. This is the 8th time this debt has been offered for sale, the last time being in November 2021 with the starting price unchanged.

In February, BID also announced the 10th auction for the debt property of Archplus Architecture and Construction Joint Stock Company. The starting price this time is VND 257 billion, equal to the original debt value and unchanged from the previous sale. The total outstanding balance as of April 15, 2021 of this debt is VND 498 billion; in which principal balance is 257 billion dong, interest debt is 173.8 billion dong and overdue penalty fee is 67.2 billion dong.

Similarly, Joint Stock Commercial Bank for Foreign Trade of Vietnam – Vietcombank (HoSE: VCB) announced the auction of the collateral of the Petroleum Design Consultancy Company to recover the loan. The auctioned asset is the property right corresponding to 20% of the contributed capital of the Petroleum Design Consultancy Corporation under the business cooperation contract in 2019 and the attached contract annexes for the construction of an office building. Dragon Tower room (now renamed PVGas Tower) in Ho Chi Minh City. The starting price is 270.6 billion VND. The deposit to participate in the auction is 10%.

  The bank aggressively lowered the debt selling price - Photo 1.

VCB has also offered to sell many times the debt as property rights corresponding to 20% of the contributed capital of the Petroleum Design Consultancy Corporation.

PVGas Tower is located in the front of the North-South axis, Nguyen Huu Tho Street, Nha Be District. Born from the cooperation between Vietnam Gas Corporation (PV Gas), PV Engineering and Phu Long Real Estate Joint Stock Company. In which, PV Gas contributes 70%, Phu Long Real Estate contributes 10% and PetroVietnam Design Consultancy Corporation contributes 20%.

According to VCB, the auction winning buyer is responsible for inheriting all rights and obligations within the capital contribution and according to the business cooperation contract and the attached appendices. At the project, the auction winner is entitled to profit, depreciation, share, and bear the losses and risks from project business activities in proportion to the contributed capital from the time of signing the appendix to the business cooperation contract. business to recognize that the auction winner is a party to the Joint Venture on behalf of the Petroleum Design Consultancy Corporation. The security property put up for auction does not include financial or other obligations.

It is known that VCB has also offered to sell the above debt many times but with no success. At the previous sale in February, VCB announced the starting price of more than 340 billion VND. Thus, the starting price of this offering has been reduced by 20%.

Another “terrible” asset being sold by VCB is the collateral of Evergreen Vietnam Industry Co., Ltd. with a starting price of nearly VND 1,100 billion. Including the right to use land plots with a total area of ​​more than 30,000 m2, the works and all machinery of Evergreen Vietnam Company in VSIP II Industrial Park and the land use right of 40,000 m2, works and all machinery of this company at VSIP IIA Industrial Park. The starting price has been reduced by nearly 100 billion VND compared to the time of sale in November 2021.

Bank for Agriculture and Rural Development of Vietnam Agribank is also selling a long-term residential land plot in an urban area with an area of ​​​​more than 3,071 m2 in Binh Thanh District, Ho Chi Minh City with a starting price of nearly 167 billion VND. This is the collateral for the loan of Thai Duong International Import-Export Production Trading Co., Ltd and the loan of V.LIFE Trading Service Co., Ltd at Agribank An Phu Branch.

  The bank aggressively lowered the debt selling price - Photo 2.

Agribank is also selling a long-term residential land plot in an urban area with an area of ​​​​more than 3,071 m2 in Binh Thanh District, Ho Chi Minh City with a starting price of nearly 167 billion VND, down more than 15.6% compared to the price of 198 billion VND that Agribank for sale in April 2021.

It is known that this property is not for sale for the first time and the above starting price has decreased by more than 15.6% compared to the price of 198 billion dong that Agribank offered in April 2021.

Previously, Agribank announced an auction to sell debts of Thanh Tung Private Enterprise with a starting price of VND 352.5 billion. While the carrying amount of the debt as of October 15, 2018 is more than VND 708.3 billion, including the principal balance of nearly VND 352.2 billion and interest debt of more than VND 356.1 billion.

The collateral of the debt includes the right to use land for production and business in Binh Chanh district, Ho Chi Minh City with an area of ​​​​nearly 7,000 m2 and the property to be formed in the future is the entire construction value of the high-rise building. Happy apartment snail. Although the starting price has continuously decreased compared to previous auctions, but continuously from November 2018 until now, Agribank has not yet successfully sold this debt.

Dr. Can Van Luc – Member of the National Financial and Monetary Policy Advisory Council, Chief Economist of BIDV, said that although banks have lowered the prices of properties for sale many times, they still ” The main reason is the difficult economy under the impact of the prolonged COVID-19 pandemic, and the low liquidity in the asset trading market in general.

In addition, the regulation does not allow to reduce the price too much, so each time the sale is sold, the price will only decrease gradually, making it unsuccessful even if it is auctioned 5-10 times. Not to mention the lack of cooperation of the borrower, so even if the auction procedure is completed, the asset transfer process is still very complicated.

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