Coteccons announced on 25/7 that a financial agreement concerning a construction contract with Ngoi Sao Viet Real Estate Investment Co., Ltd. has been recognized by the Hanoi People's Court. This agreement paves the way for the recovery of a significant bad debt.
Bolat Duisenov, Chairman of Coteccons, commented, "The recognized agreement demonstrates that complex issues can always be resolved when parties engage in dialogue based on respect and responsibility."
The original debt stemmed from Coteccons' role as the general contractor for a Tan Hoang Minh real estate project in Hanoi. Following Tan Hoang Minh's financial and senior personnel challenges in 2022, Coteccons fully provisioned for the outstanding debt. This action caused the construction company to report losses for a period.
As of 31/3, Coteccons reported total bad debts of nearly 1,500 billion VND. Of this amount, 526 billion VND was attributed to Ngoi Sao Viet Real Estate Investment Co., Ltd. The company confirmed that collected debt would be reflected in its financial statements, adhering to current accounting standards.
During a shareholder dialogue in mid-June, Nguyen Chi Thien, Deputy General Director of Coteccons, highlighted Tan Hoang Minh's efforts to restart several real estate projects, signaling their operational restructuring. He viewed this as a positive indicator for Coteccons' debt recovery. Leaders from both companies have also met for candid discussions, noting progress in resolving the outstanding debt.
"I believe that the ability to recover this debt is certain", Thien told shareholders.
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Coteccons workers on a tower crane. Photo: Coteccons
Coteccons' current bad debts primarily stem from construction contracts signed before 2022. Addressing shareholder concerns, the management consistently reassures that the company effectively controls these debts, preventing adverse effects on its financial health and operational capacity.
Bolat explained that provisioning for bad debts is not inherently negative. He clarified that it does not mean the debt is forgotten or unrecoverable; instead, the company maintains a dedicated team to closely monitor and pursue payment from the project owners.
Coteccons' management believes that effectively resolving long-standing issues enhances the company's resilience, laying the groundwork for long-term development opportunities.
For the fiscal year 2026, ending on 30/6, Coteccons projects revenue exceeding 30,000 billion VND, an increase of approximately 30% from the previous year and surpassing its targets. Profit is anticipated to rise by about 50%.
By the end of March, Coteccons recorded an order backlog of nearly 65,500 billion VND, its highest in operational history. This backlog secures a substantial workload for the next two to three years. Management states that the company actively seeks new projects offering good revenue and profit, while also prioritizing challenging constructions to enhance team capabilities.
Phuong Dong
