Firm associated with Van Thinh Phat owes $224M

By Tat Dat   October 13, 2023 | 03:54 am PT
Firm associated with Van Thinh Phat owes $224M
Palace Saigon Hotel operated by Bong Sen Corp in District 1, Ho Chi Minh City. Photo courtesy of the company
Real estate firm Bong Sen, a company under investigation for its dealings with disgraced property developer Van Thinh Phat Group, owes nearly VND5.47 trillion ($223.77 million) in overdue bonds.

The delay in redeeming the bonds stems from the fact that Bong Sen’s assets were frozen last year when police said it was one of 762 companies affiliated with Van Thinh Phat, whose leaders were arrested last year for fraud.

Bong Sen issued the bonds in October 2021 and the issuance was arranged by Tan Viet Securities, a company that consulted with Van Thinh Phat affiliate An Dong Company.

The issuance was worth VND4.8 trillion with a coupon rate of 10.5% annually. Its maturity was originally set for five years but was later changed to June this year. The coupon is now at VND670 billion.

Bong Sen issued the bonds to develop property projects in District 5, Ho Chi Minh City.

It used the money raised for a venture with another company, Vina Alliance, to develop an office, mall and residential complex at 152 Tran Phu, District 5.

But the project was then halted after an inspection by authorities. Bong Sen has been unable to contact Vina Alliance leaders since November last year and thus has not recovered money to redeem the bonds.

Bong Sen leaders told an extraordinary general meeting in August that the company will use its existing assets, including hotels and restaurants, to redeem the bonds.

Bong Sen was originally a subsidiary of state-run tourism company Saigontourist and was equitized in 2005.

It owns prime land lots in HCMC, where it operates hotels and restaurants.

Bong Sen chairman Vu Thi Hong Hai said earlier that the company was waiting for the conclusion of an investigation into its relations with Van Thinh Phat.

Van Thinh Phat chairwoman Truong My Lan was arrested in October last year for alleged fraud related to the issuance and trading of bonds worth trillions of dong (VND1 trillion = $41.87 million).

She established Van Thinh Phat in 1992 as a restaurant and hotel operator before moving into property development.

The company has many projects in prime locations in Ho Chi Minh City.

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