Hoang Anh Gia Lai plans to reduce debt and issue shares in HY 2025!

Hoang Anh Gia Lai plans to reduce debt and issue shares in HY 2025!

On June 6, 2025, Hoang Anh Gia Lai Joint Stock Company (ticker symbol: HAG) held its annual general meeting, at which important measures for the company's financial recovery were decided. The plan is to issue a maximum of 210 million shares at a price of VND 12,000 per share. This procedure is intended to convert bonds with a total value of VND 2,520 billion.

The group of bondholders includes seven organizations and individuals, including Huong Viet Investment Consulting Joint Stock Company, which is the largest creditor with nearly VND721 billion. This is a crucial step to further reduce Hoang Anh Gia Lai's debt.

Debt reduction and future plans

Under Mr. Duc's leadership, the company has reduced 97% of its debt over the past nine years and plans to fully pay off the remaining debt of up to VND4,000 billion by the end of the second quarter of 2025. In this context, Hoang Anh Gia Lai secured 1 trillion VND (equivalent to 39.2 million USD) to pay off outstanding debts. This results in a significant reduction in the outstanding principal debt from VND6,596 trillion to around VND766 billion, particularly through repayments to the Bank for Investment and Development of Vietnam (BIDV) at the end of 2024, which accompanied many challenges.

The financial resources for these repayments come mainly from the Hoang Anh Gia Lai International Agriculture Joint Stock Company (HAGL Agrico). This company is now part of the Thaco Group, with HAG continuing to hold shares in it. While HAGL Agrico was struggling with deregistrations due to annual losses, HAG's recent payment to HAGL Agrico resulted in an improvement in the company's financial situation.

Strategic developments and outlook

Mr. Duc emphasized the importance of the remaining debt editors and hopes for the support of shareholders. In addition to reducing debt, Hoang Anh Gia Lai plans to plant 30,000 hectares of various tree species by 2030, including 2,000 hectares of mulberry for silk production and 4,000 hectares of coffee cultivation. The Arabica coffee variety, grown on the red earth plateaus of Laos, is currently selling at $9,000 per tonne.

To reward employee commitment, Mr. Duc announced the issuance of 12 million bonus shares under an Employee Stock Ownership Plan (ESOP). The strict conditions of the ESOP shares require that employees have been committed for at least 10 years and their vesting is limited to 5 years. Mr. Duc commended employees for their efforts in difficult conditions and is confident that shareholders will support this proposal.

Investors and observers are looking forward to the “extremely good” financial report expected by Mr Duc at the end of the year. It remains to be seen whether Hoang Anh Gia Lai can achieve its ambitious goals and fully resolve the debt problem. The company intends to pay dividends only when profits are made and remains in a market subject to accelerated growth but also significant risks, making the need for a stable and sustainable financial strategy all the more urgent.