S&P says Vietnam's HAGL now "vulnerable'

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HAGL Joint-Stock Co., Vietnam's second largest listed property developer by market value, has been assigned a "˜B-' credit rating with a negative outlook by Standard & Poor's, citing weak liquidity and business risks.

According to the ratings agency, the company plans large capital expenditures in 2012 while the business environment remains challenging.

"We assess the company's business risk profile as "˜vulnerable' and its financial risk profile as "˜aggressive'," S&P said, noting the operating performance and liquidity could stay "weak" in the next six to 12 months.

HAGL, also known as Hoang Anh Gia Lai, has dismissed the assessment, with Deputy General Director Vo Truong Son saying S&P had not contacted his company before assigning the rating.

He said HAGL is not under liquidity pressure since it has recently raised VND313 billion (US$15 million) from selling 10 million shares in its hydropower business.

Son said many residential projects of the company are selling well. The company even had a cash surplus of VND2.2 trillion ($105.6 mi) at the end of June, he added.

Fitch Ratings last month also warned HAGL about its tight liquidity, but the company played it down, saying its cash flows would be stronger in the coming months.

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