A view of the HAGL Myanmar Centre. — Photo cafef.vn

HA NOI (Biz Hub) — The recent rumours about property and agriculture group Hoang Anh Gia Lai (HAGL) facing an inspection were groundless, State Bank of Vietnam (SBV) Deputy Governor Nguyen Phuoc Thanh said.

Thanh has affirmed this to the local press, after some online forums last week posted a document carrying the central bank's requests for a review of the performances at the firm.

The piece, signed by the central bank's deputy chief inspector, Nguyen Van Hung, required credit institutions to report on loans they lent the company and its production and business situation as of December 31, 2015.

It also asked for specifications of the problems emerging in the lending process and the suggestion about debt reclaiming measures for the firm. Reports on these were to be submitted to the central bank before January 18.

HAGL share prices continuously hit the floor and ended last week at a record low of VND7,900 (35 cents) per share on the HCM City Stock Exchange, as a result of the rumours.

Thanh explained to VnExpress online, that in a document sent to the SBV two weeks ago, HAGL asked for commercial banks' reconsideration of loans and interest rates so that it could better manage money flows.

Following this proposal, the central bank conducted the commercial banks' review of HAGL performances.

"Neither has the company been inspected for violating the law, nor is it suffering losses or any liquidity imbalance. The SBV is just giving the support that the firm asks for," Thanh said.

Thanh added that the central bank advocated the active proposal, which the company delivered at a time when instability in the global economy significantly impacted the agricultural sector. Rubber prices in particular had fallen by 75 per cent, causing difficulties for the firm in the short term.

"The authorities are just worried about enterprises which say they are healthy while, in fact, they are struggling. It is a positive act for HAGL to look straight at the obstacles ahead," he said.

According to Thanh, the company has actively restructured itself. It now focusses on property and agriculture, after divesting from areas such as mineral and hydroelectricity.

It also has a good position in the market, generating many jobs and bringing about significant revenues to the State budget.

Thanh said although commercial banks had not presented their reports on schedule by January 18, preliminary checks showed that HAGL's debts, mostly medium to long term, were not bad loans. Its ratio of debts to assets remained secure.

He said the SBV would immediately work with commercial banks to figure out solutions for the company, as soon as they submitted their reports.

As agriculture was among the areas where financing was prioritised by the government, banks were likely to adjust terms and interest rates for loans to help the company through its difficulties.

In an interview with Thanh nien (Young People) newspaper, Thanh said the SBV apologised to HAGL for the partial leak of document and took responsibility for the consequences that the incident had on the joint stock company, as well as its investors and shareholders.

HAGL officials have not made a statement about the rumours, but the company quoted this interview on its website yesterday. Its shares closed up 0.5 points at VND8,400 (37 cents) per share yesterday.

In its latest financial report, the company said its total assets reached VND47.60 trillion (US$2.12 billion) last September 30, 2015, rising 31 per cent from the figure recorded on December 30, 2014.

Its ownership capital hit VND16.88 trillion ($750.22 million) last September 30, up 10 per cent over the end of 2014. 

Since 2013, the company has been developing some 42,500 hectares (ha) of rubber, 17,300ha of palm trees, 8,000ha of sugarcanes and 5,000ha of maize in Viet Nam, Laos and Cambodia. It has also been breeding a flock of 43,500 cows in three countries.

One of its key property projects is the US$440 million HAGL Myanmar Centre. It opened the first phase of a shopping centre, hotel and serviced office complex in Myanmar last June. — VNS