HBC to Issue 51.4M Shares to Settle 514B VND Debt at 10,000 VND

Overview

Hoa Binh Construction Group (HBC) has approved a plan to issue 51.4 million shares to swap for over 514 billion VND of debt owed to 99 suppliers, subcontractors, and other partners. The conversion price is set at 10,000 VND per share, which is about 2.3 times the current market price of HBC shares. This debt-for-equity swap is expected to be executed in the third quarter of this year.

Key Facts

• HBC will issue 51.4 million shares to settle 514 billion VND of debt with 99 creditors.
• The conversion price is 10,000 VND per share, representing a 2.3x premium to the market price of 4,300 VND (as of 2026-08-04).
• The largest creditor, Matec Construction Machinery Company, will receive over 9.2 million shares.
• Other major creditors include Best Quality Construction, Interhouse LA, and LG-Cons Construction.
• The debt swap will eliminate nearly 69% of the total debt owed to this group of creditors.
• The plan is scheduled for implementation in Q3 2026.
• HBC’s book value per share is 5,638 VND (consolidated) and 9,624 VND (parent company), while the 30-day average reference price was 5,037 VND.

What Happened

According to a recently approved plan, Hoa Binh Construction Group (HBC) will issue 51.4 million shares to swap for over 514 billion VND of debt with 99 suppliers, subcontractors, manufacturers, and other partners. The issuance price is 10,000 VND per share, meaning each 10,000 VND of debt will be exchanged for one HBC share. This will result in the cancellation of more than 514 billion VND of debt, equivalent to nearly 69% of the total debt owed to this group.

The plan is expected to be executed in the third quarter of this year. The largest creditor, Matec Construction Machinery Company, will receive over 9.2 million shares, followed by Best Quality Construction, Interhouse LA, and LG-Cons Construction. The company, led by Chairman Lê Viết Hải, stated that the conversion price was based on the book value and trading price of the stock. The book value per share is 5,638 VND according to the audited consolidated financial statements for 2025, and 9,624 VND according to the parent company’s separate financial statements. The average reference price over the last 30 trading sessions on UPCoM (from April 20 to June 3) was approximately 5,037 VND.

Market Context

HBC shares have been trading below par value since September 2023. About a year later, HBC was delisted from the HoSE and moved to the UPCoM market. Currently, the stock is still valued below its book value, with a P/B ratio of only 0.73 times. The stock closed at 4,300 VND on 2026-08-04, down nearly one-third from the beginning of the year. The debt-for-equity swap at a premium price is part of a broader financial restructuring strategy.

Strategic Significance

This debt-for-equity swap is a critical step in HBC’s financial restructuring. By converting a significant portion of its debt into equity, HBC reduces its leverage and improves its balance sheet, which could enhance its ability to secure new contracts and financing. The move also aligns with the company’s goal of returning to revenue growth, targeting 10,000 billion VND in revenue for 2026, more than double the previous year, with a net profit of 250 billion VND. If successful, this would mark the first time since 2022 that HBC returns to five-digit revenue figures. The restructuring is intended to improve operational efficiency, reduce costs, and enhance cash flow, which could eventually support a recovery in the stock price.

What to Watch

• Execution of the share issuance in Q3 2026 and the actual number of shares issued.
• HBC’s quarterly financial results, particularly revenue and profit, to see if the 2026 targets are on track.
• Any further debt restructuring or capital-raising activities.
• Movement in HBC’s stock price and whether it approaches the conversion price of 10,000 VND.
• Regulatory approvals and any changes in the company’s listing status on UPCoM.