HAGL counts on foreign funds for huge projects

25 Dec
VNREHoang Anh Gia Lai Corp. (HAGL) is looking to international capital sources for its multi-million projects in Vietnam, Laos and Cambodia as the group finds it hard to access big loans domestically, said the group’s top leader.

It is difficult to look for big loans, particularly the long-term ones from local banks and the fact is that lending interest rates are high, HAGL chairman Doan Nguyen Duc told the Daily before an extraordinary shareholder’s meeting here on Thursday. The group at the meeting sought approval of shareholders for a plan to raise a maximum US$200 million through issuing callable bonds in overseas markets.

Duc said HAGL’s board of directors had passed the plan and they wanted agreement from shareholders to move forward. At the meeting, the overwhelming majority of shareholders voted in favor of the bond issuance and then having these certificates of debt listed on the Singapore Exchange.

Duc believed in the success of the bond issuance, saying that the money to be raised from the dollar-denominated bonds would be mainly used for growing 51,000 hectares of rubber trees in Vietnam, Laos and Cambodia, as well as constructing hydropower plants in Vietnam and Laos.

Vo Truong Son, deputy general director of HAGL, told the Daily after the shareholder’s meeting that the annual coupon of the bonds would be publicized after Standard & Poor’s and Moody’s announced their credit ratings for the group, hopefully in January next year.

Son said that the two international rating agencies had engaged in HAGL after Credit Suisse signed an agreement to assist the group with issuing the bonds more than one month ago.

Son said HAGL would use the shares at its subsidiaries as a guarantee for the bonds, which have a term of five years. The group would have an option to redeem prior to their maturity, or around 2014 when most of the group’s major rubber plantation, hydropower generation and mining projects generated revenues.

Son emphasized that as the bond issuance was not urgent at the moment, HAGL would wait until an opportune time came so that it would be able to make the most of the bonds. He explained the group now had VND3.6 trillion (some US$185 million) available for its investment projects throughout 2011 and even until the first quarter of 2012.

HAGL chairman Duc said to prepare sufficient capital for investment projects in the long term and to cash in on the coming opportunities, HAGL had completed a deal to sell 19 million of its shares valued at around US$70 million to Deutsche Bank in December and sold convertible bonds worth some US$60 million to Singapore’s Temasek earlier this year.

Duc said that HAGL would have finished planting 51,000 hectares of rubber tress in 2012, a year when the group will have yields from rubber projects. The group plans to invest some US$225 million in this area.

HAGL has spent US$58 million on hydropower developments, and will pump an extra US$120 million in these projects next year and US$137 million in 2012. The group is aiming to commission all its hydropower projects with combined generation capacity of 420 megawatts by the end of 2012.

HAGL put into operations its Dak Srong 2 Hydropower Plant in October and saw its Dak Srong 2A go online in the first quarter of next year. The Ba Thuoc 1 and 2, and Dak Srong 3A are under construction.

Repoted by Binh Nguyen | The Saigon Times

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