Hoang Anh Gia Lai (HAG) divests from Bapi pork sales chain

Despite continuously making positive predictions about the "pig eating banana" business, the Board of Directors of Hoang Anh Gia Lai Joint Stock Company (HAG) has just had to approve the transfer of all shares of the Bapi pork sales chain.

Specifically, the company approved the transfer of shares at BAPI Hoang Anh Gia Lai JSC (BAPIHAGL). Accordingly, HAGL will sell all 2.75 million BAPIHAGL shares, with a par value of VND10,000/share. If the transaction is successful, BAPI Hoang Anh Gia Lai will no longer be an affiliated company of HAGL.

BAPI Hoang Anh Gia Lai was established in May 2022 with a charter capital of 50 billion VND and is currently a distribution chain of Bapi banana-fed pork products. The company's headquarters is located in Pleiku City, Gia Lai Province.

Notably, in December, Gia Lai Livestock Joint Stock Company, another company of Hoang Anh Gia Lai, paid VND750 billion (including the entire principal debt of nearly VND587 billion and a portion of medium-term interest of more than VND163 billion) to Eximbank to pay off loans from 2014.

Also related to the debt repayment issue of Hoang Anh Gia Lai, the company has just had to announce a resolution for both the hotel and the hospital to get money to pay the debt.

Specifically, HAGL has transferred 9.9 million shares that the unit currently owns at the University of Medicine and Pharmacy Hospital - Hoang Anh Gia Lai. This amount of shares corresponds to the ownership ratio of 99% of the charter capital at the University of Medicine and Pharmacy Hospital Joint Stock Company - Hoang Anh Gia Lai. According to the previous announcement, this amount will be used by the company to pay the principal and interest of the maturing bonds issued since 2016.

Previously, Hoang Anh Gia Lai also had to sell Hoang Anh Gia Lai Hotel located at No. 1 Phu Dong, Phu Dong Ward, Pleiku City, Gia Lai Province and earned about 180 billion VND. This amount was also used to pay off debt.

Recorded hundreds of billions in profits but had to sell many assets to pay off debts

A rather strange paradox is that in the past 2 years, HAG has continuously reported profits of up to hundreds of billions of VND per quarter. However, the company still has to continuously sell assets to get money to pay off due debts. The last loss reported by HAG was from the first quarter of 2021 with a loss after tax of about 68.8 billion VND.

Most recently, the plan to issue 130 million private shares of HAG was also implemented with the purpose of raising capital to pay off debt.

Regarding business results, in the most recent third quarter, Hoang Anh Gia Lai achieved revenue of VND1,889.4 billion, up 31.1% over the same period. Profit after tax reached VND324.6 billion, up 12.2%. Part of the sudden increase in profit was recorded from the liquidation of fixed assets, contributing VND144.1 billion to the company's third quarter business results.

Entering October 2023, Hoang Anh Gia Lai's revenue also recorded 711 billion VND, an increase of 52.3% over the same period. Of which, the fruit tree segment contributed 57.7%, equivalent to 410 billion VND. The livestock segment contributed 27.8%, equivalent to 198 billion VND. The supporting industry was 103 billion VND. In October, the company continued not to announce profits as it did in previous monthly reports.