HBC Plans 10,000 VND Share Issue to Swap 514 Billion VND Debt Despite 5,037 VND Market Price

Overview

Hoa Binh Construction Group (HBC) announced a plan to issue 51.4 million shares at 10,000 VND each to swap 514.2 billion VND in debt with suppliers, despite the stock trading around 5,037 VND. The company also targets doubling revenue to 10,000 billion VND in 2026. The move is part of HBC’s restructuring efforts to reduce leverage and improve financial health.

Key Facts

• HBC plans to issue 51.4 million shares at 10,000 VND per share to swap 514.2 billion VND in debt with suppliers.
• The swap price is nearly double the 30-day average market price of 5,037 VND (as of June 3, 2026).
• Book value per share stood at 5,638 VND on a consolidated basis and 9,624 VND on a parent-company basis at end-2025.
• HBC has agreements with 99 creditors; total debt on the parent-company audited financials was 747.6 billion VND, of which 514.2 billion VND will be converted.
• Major creditors include Matec Construction Machinery (92.2 billion VND), Searefico Engineering & Construction (37.7 billion VND), Best Quality Construction (32.8 billion VND), and ATAD Steel Structure (31.3 billion VND).
• The issued shares will be locked up for one year from the end of the issuance.
• HBC targets 2026 consolidated revenue of 10,000 billion VND (more than double 2025’s 4,620 billion VND) and net profit of 250 billion VND.

What Happened

Hoa Binh Construction Group (HBC) announced at its 2026 Annual General Meeting that it will issue 51.4 million shares at 10,000 VND each to swap 514.2 billion VND in debt with suppliers, subcontractors, and manufacturers. The company stated it has negotiated written agreements with 99 creditors. The plan is expected to be implemented from Q2 2026 or after regulatory approval.

HBC also reported 2025 revenue of 4,620 billion VND, down 28% year-on-year, and net profit of 252 billion VND. For 2026, the company targets consolidated revenue of 10,000 billion VND and net profit of 250 billion VND. In Q1 2026, HBC posted a profit of 22.7 billion VND, up from 5.4 billion VND a year earlier, but accumulated losses stood at nearly 2,044 billion VND as of March 31, 2026.

Market Context

HBC shares closed at 5,000 VND on June 30, 2026, with low trading volume of 410,500 shares. The stock has been under pressure due to the company’s high debt and accumulated losses. The debt-for-equity swap, while dilutive, could reduce financial risk if executed successfully. HBC is listed on HOSE and operates in the construction and materials sector, which has faced headwinds from a sluggish real estate market.

Strategic Significance

The debt-for-equity swap allows HBC to reduce its debt burden by converting 514.2 billion VND of liabilities into equity, improving its balance sheet and potentially lowering interest costs. The issuance at a premium to market price signals creditor confidence in the company’s turnaround. However, the aggressive revenue target of 10,000 billion VND in 2026 implies a 116% increase from 2025, which may be challenging given the current market conditions and accumulated losses.

What to Watch

• Regulatory approval from the State Securities Commission for the share issuance.
• Q2 2026 earnings report to assess revenue and profit trajectory toward the full-year target.
• Progress on debt conversion and any additional creditor agreements.
• Changes in HBC’s order backlog and new contract wins in the construction sector.
• The impact of the lock-up period on share liquidity and price stability.