The future of the ill-fated $256-million Saigon One Tower remains uncertain after Vietnam Asset Management Company recently announced that the project will be seized due to the owners’ accruing significant bad debts.
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Earlier this year, Alpha King Real Estate Development announced acquiring the project that has been delayed for more than ten years from a consortium of old investors.
The developers, however, have not paid debts to the project lender Vietnam Asset Management Company (VAMC).
According to VAMC, this project was seized because Saigon One Tower JSC, the developer of Saigon One Tower, failed to pay off its debts (principal and interest) of VND7 trillion ($308 million) despite numerous requests from VAMC.
VAMC previously signed a debt purchase contract with a number of credit institutions for the debts of a group of customers, including Saigon One Tower JSC, Lien Phat Investment JSC, Minh Quan Investment and Construction Consultant JSC, and Tan Superdeck M&C JSC.
“Although VAMC has repeatedly urged the group of customers to meet their repayment obligations, they have not obliged nor adopted a viable repayment plan,” a representative from VAMC said.
VAMC asked Saigon One Tower JSC to hand over collateral to fulfil its obligations, which it failed to do, therefore prompting VAMC to seize the collateral.
According to Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, the seizure was conducted in accordance with Article 7 of Resolution No.42 of the National Assembly on addressing non-performing loans (NPLs).
Saigon One Tower has a total space of more than 6,670 square metres with the total investment capital of VND5 trillion ($256 million), including a 46-storey building consisting of retail properties, offices for lease, and high-end apartments for sale. The project has been stalling since 2011 after 80 per cent of the construction was finished.
The developer of Saigon One Tower was not available for comments.
The asset portfolios seized by VAMC in Saigon One Tower include ownership, the right of operations of the whole construction consisting of underground basements, a trading centre, offices for lease, and other additional constructions.
According to Chau, the assets will auctioned later on. “A transparent auction will bring about higher revenue for the state budget than any other assignment,” Chau said.
Nguyen Van Duc, chairman of Dat Lanh Real Estate, commented that it is not easy at all to sort out the extensive and complicated assets of Saigon One Tower.
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