Financial Struggles of BB Sunrise Power Amid Asset Sales

Founded in 2019 with a registered capital of VND500 billion, BB Sunrise Power is a subsidiary of BB Power Holdings, part of the larger BB Group which operates in various sectors. The group is led by Vu Quang Bao, also the president of Bitexco Group, and sibling to businessman Vu Quang Hoi.

The BB Group-Bitexco network is currently selling assets to meet upcoming bond payments totaling trillions of dong.

As per the Hanoi Stock Exchange (HNX) update, BB Sunrise Power is in the process of selling collateral to repay its bond obligations associated with the BBSP.H.20.23.001 bonds. This move follows approval from the bondholders.

The collateral in question is Victoria Sapa, a hotel owned by Victoria Sapa Hotel Co Ltd. BB Sunrise Power aims to finalize the release of the mortgage lien and deregister the secured transactions, facilitating a sale of the hotel to a third party, valued at VND210 billion.

Should the transaction go through, the company anticipates around VND30 billion in taxes and expenses, leaving approximately VND180 billion available to service bond principal and interest payments.

Victoria Sapa is currently mortgaged with Vietcombank’s Hanoi branch.

In late 2020, BB Sunrise Power issued bonds worth VND500 billion, initially for three years but later extended to five years at an interest rate of 10.3 percent annually. This bond issue is handled by Tan Viet Securities (TVSI).

The company has repeatedly sought extensions on its debt obligations, citing difficulties in securing payment funds.

Out of the total issued BBSP.H.20.23.001 bonds, approximately VND23 billion has been redeemed, while VND477 billion remains outstanding.

BB Sunrise Power primarily engages in electricity generation and transmission, executing hydropower projects in Ha Giang and Kon Tum, along with wind and solar projects in Ninh Thuan. However, despite the perceived profitability in the energy sector, BB Sunrise Power has consistently posted losses.

For the first half of 2024, the company declared a loss of VND134 billion, compared to a loss of VND248 billion during the same timeframe the previous year. In contrast, 2022 saw a minimal profit of VND220 million against a loss of VND67 billion in 2021.

By June 2024, BB Sunrise Power reported negative shareholder equity of VND222 billion and liabilities totaling VND4.885 trillion, which includes VND477 billion of bond debts.

In 2022, the company failed three times to meet its VND47 billion interest and VND500 billion principal payments for the aforementioned bond issue, leading bondholders to agree to extend the deadline to December 22, 2025.

As per the agreement, BB Sunrise Power is committed to two buyback phases of 10 percent of the bonds in 2024 and three phases for the remaining 80 percent in 2025.

Recently, BB Power Holdings, the parent firm, reported a VND185 billion loss in the first half of 2024, continuing a trend of previous losses with VND740 billion in 2023 and VND153 billion in 2022.

As of June 2024, BB Power Holdings’ assets dipped by 22 percent year-on-year, falling from VND2.423 trillion to VND1.89 trillion, with accounts payable reaching VND6.955 trillion and bond debt of VND310 billion.

Challenges are also affecting businesses within the Bitexco ecosystem, associated with brothers Vu Quang Bao and Vu Quang Hoi, notably including the release of their investment in Saigon Glory Co Ltd, the developer behind the reorganized Once Central HCM project, now termed The Spirit of Saigon, a $500 million 6-star hotel project.

Additionally, Bitexco has pledged its shares in Saigon Glory at banks to fulfill obligations on ten bond issues with a total face value of VND10 trillion. A substantial VND200 trillion in bonds are set to mature within the upcoming year.