Construction firms overhaul finances for next growth cycle

The recovery of Vietnam's real estate market and a new wave of infrastructure investment are creating fresh opportunities for the country's construction industry.

To capitalise on these opportunities, many construction firms and contractors are implementing financial restructuring plans aimed at reinforcing their internal strength and market standing.

Once Vietnam's leading construction contractor, Hoa Binh Construction Group JSC has faced prolonged financial difficulties since 2022 due to mounting receivables and severe cash flow disruptions.

As the real estate market weakened, numerous large-scale projects stalled, leaving many developers unable to pay contractors. With cash inflows from project owners drying up, Hoa Binh no longer had sufficient resources to service its debt obligations.

After an extended restructuring process, Le Viet Hai, chairman of the Board of Directors of Hoa Binh Construction, said the company had overcome its most difficult period and entered a new phase of ‘moving forward with firm footing’.

In 2026, Hoa Binh identified financial discipline as its top priority, focusing on strengthening its balance sheet by converting debt into equity, thereby easing cash repayment pressure and creating greater financial flexibility for construction activities.

Under its latest restructuring plan, Hoa Binh intends to issue 51 million new shares worth approximately $20.5 million. The shares will be offered to creditors that have signed written agreements with the company, including suppliers, subcontractors and manufacturing partners.

In the construction market, Hoa Binh recently signed a framework agreement for general contracting services with Sunshine Group JSC.

Under the agreement, Sunshine Group will award Hoa Binh Construction engineering, procurement and construction (EPC), or design-and-build contracts for projects developed by Sunshine Group and its subsidiaries, with a total estimated value of approximately $1.20 billion.

Hoa Binh is not alone. Many construction companies are entering a new growth cycle as the real estate market recovers and infrastructure projects generate a substantial pipeline of work.

However, the opportunities are accompanied by rising costs, higher interest rates and continued volatility in fuel and construction material prices.

Against this backdrop, many contractors are pursuing financial restructuring to reduce risks and strengthen their execution capacity.

According to Dang Trong Duc, CEO of Phuc Hung Holdings JSC, the company's strategy for 2026-2031 is to avoid pursuing rapid revenue growth and instead prioritise restructuring to address internal weaknesses.

Phuc Hung Holdings' key measures include selecting financially strong developers from the bidding stage, accelerating debt collection, divesting non-core assets and improving working capital turnover.

The company also plans to increase charter capital and issue corporate bonds instead of relying on bank loans.

In 2026, Phuc Hung Holdings targets revenue of $128 million, up 115.7 per cent from 2025, while net profit after tax is projected at $1.6 million.

The company said it would focus on executing a series of contracts at projects including Eurowindow Sport Garden Dong Vinh in Nghe An province, Tuyen Son High-end Apartment Complex (The Meridian Danang), and Central Square Thai Nguyen, among others.

SCI E&C JSC recently announced plans to raise $8.4 million from existing shareholders to repay debt and supplement working capital, following an earlier fundraising of $4.6 million at the beginning of 2026.

The capital increase is intended to meet funding needs for large-scale EPC projects while enhancing the company's contracting capacity and optimising financing costs.

Also seeking to restructure its debt portfolio and reduce interest expenses, FECON Corporation has submitted to shareholders a plan to raise approximately $34.99 million through a rights offering, a private placement and an employee stock ownership plan.

In addition, FECON has identified debt collection as its highest priority while continuing to optimise operational processes and maintain strict cost control.

FECON is currently involved in the construction of several major railway projects, including Hanoi Metro Line 5’s Van Cao-Hoa Lac section and Hanoi Metro Line 2’s Nam Thang Long-Tran Hung Dao section.

Similarly, Construction JSC No. 47 plans to raise $7.27 million for investment and working capital purposes. Meanwhile, Construction and Design No.1 Corporation is proceeding with a plan to issue more than 46.6 million new shares to raise approximately $18.6 million for debt repayment and investment.

According to KB Securities Vietnam, Vietnam's public investment plan for 2026 is valued at $43.2 billion and is expected to continue expanding in the coming years.

Investment in the national power transmission grid alone is projected to reach $18.1 billion during 2026-2030. Together with sustained demand for transport and power infrastructure, this is expected to provide a long-term pipeline of projects for infrastructure construction contractors.

Against this backdrop, overhauling financial health is no longer merely a short-term response to challenging market conditions. Instead, it has become a strategic preparation that will enable construction companies to adapt to a new business cycle and position themselves for long-term growth.

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