How does FLC intend to restructure?

FLC has many large real estate projects across the country.

Nearly a year after former Chairman Trinh Van Quyet was arrested, the new leadership of FLC Group Corporation has shared for the first time more specific information about the restructuring plan of this enterprise in the context of continuing difficulties.

At the extraordinary meeting last weekend, Ms. Tran Thi Huong, FLC's permanent Deputy General Director, shared with shareholders that in 2023, the company will focus on retaining two core areas including real estate development, resort business, golf courses and implementing M&A projects to restructure loans and have capital to maintain operations.

During Mr. Trinh Van Quyet's time, in addition to the above sectors, FLC also operated in many other fields such as air transport, financial investment, mineral exploitation and processing, gold - jewelry, and agriculture. Of which, Bamboo Airways is the project that Mr. Quyet invested in and devoted the most effort to in the period of 2018 - 2022. However, in the near future, FLC will also transfer shares in this airline.

Last July, after electing Mr. Le Ba Nguyen as Chairman of the Board of Directors, FLC only announced that it would move towards a comprehensive restructuring process. Explaining the upcoming downsizing plan, Mr. Nguyen said: "FLC's strengths and core have always been real estate investment, resorts, and golf courses. The remaining areas, due to initial investment capital issues, have not been financially effective."

According to Mr. Nguyen, many domestic and international investors want to join the group. Therefore, FLC will transfer its subsidiaries and affiliates to focus on investing in core areas.

Regarding Bamboo Airways, Mr. Nguyen said he would notify shareholders about the plan to sell shares after financial experts have developed a specific assessment plan. Currently, FLC has invested VND4,015 billion in Bamboo Airways, equivalent to 21.7% of charter capital. However, in the past two years, FLC had to set aside VND373 billion and VND3,642 billion in provisions, respectively, because Bamboo Airways has not been able to make a profit.

In the real estate sector, according to Ms. Huong, FLC aims to continue promoting investment promotion activities to be approved as an investor for new projects, and ineffective projects will be reviewed and a transfer plan will be proposed. She also affirmed that for sold products, the company will continue to maintain its responsibility to recover debts, focus on handing over products to customers, and complete infrastructure and legal procedures.

The Chairman of the Board of Directors of FLC said that the group still has a large source of 200 projects at different legal levels in provinces and cities. This number was over 300 projects before the incident of FLC senior leaders in March 2022.

In the resort sector, the group has four complexes in Quy Nhon, Thanh Hoa, Quang Ninh, and Vinh Phuc. "We will focus on increasing the occupancy rate at these resorts. FLC also has a detailed plan, assigning specific targets to each complex to optimize operational efficiency and increase revenue from this segment as the tourist season approaches," said the FLC deputy general director.

Ms. Huong added that FLC will accept the transfer of projects to have a certain source of capital for production and business. At the same time, the M&A of FLC's projects aims to restructure loans and reduce outstanding debts with credit institutions. Last year, FLC paid more than VND7,000 billion in obligations to credit institutions (excluding interest and fees). In addition, FLC will also rearrange departments and affiliated units, and reduce personnel to optimize operations.

Mr. Nguyen Chi Cong, deputy general director of FLC, said that the group's executive board is also focusing on building this year's business plan. However, FLC leaders have not provided more specific information about the current financial health and last year's business results.

According to the most recent financial report published in October 2022, the company lost nearly VND 1,900 billion in the first three quarters of the year. Currently, FLC has not been able to announce the financial report for the fourth quarter of 2022 and the audited financial report for 2021.

This is also one of the reasons why FLC shares were delisted by HoSE. At the end of the month, this stock was transferred to the UPCoM system, but was delisted by the Hanoi Stock Exchange (HNX) immediately after. HNX requested FLC to explain the reasons for violating information disclosure regulations and propose a solution to overcome the situation of being suspended from trading for 15 days starting from February 24. However, up to now, the company has not yet provided an explanation. At the recent extraordinary meeting, the Board of Directors continued to affirm that it is making every effort to promote information disclosure roadmaps.

According to VnExpress