A Vietnamese multi-sector conglomerate, plagued by financial woes over its loss-making agricultural arm, will have part of its massive debt restructured, under a plan proposed by its creditors and backed by the country’s central bank.

The State Bank of Vietnam (SBV) gave the green light to the proposed solutions to help Hoang Anh Gia Lai Group (HAGL) overcome its debt troubles on Tuesday, adding that it will seek government approval for the official plan.

HAGL, owned by mogul Doan Nguyen Duc, is trading on the market via the HAG and HNG stocks, with the latter owned by its agricultural arm, Agrico.

A recent independent audit at HAGL revealed multiple issues troubling the multifaceted giant.

As of the end of 2015, HAGL owed more than VND31 trillion (US$1.38 billion) in debt, with short- and long-term loans accounting for VND27.09 trillion ($1.21 billion). Debts accrued by the company’s agricultural unit, Agrico, made up more than 50 percent of the total.

The group is due to repay VND8.29 trillion ($370 million) by the end of this year.

According to an auditor’s report, 31 percent of the VND27.09 trillion debt is based on short-term loans, with BIDV, Eximbank and ACB being the three biggest creditors.

State-run BIDV has lent HAGL more than VND10.7 trillion ($477.68 million), whereas Eximbank offered long-term loans worth a total of VND3.15 trillion ($140.63 million).

Vietnamese bank ACB and its securities arm, ACBS, were third with more than VND2 trillion ($89.29 million) worth of loans lent to HAGL.

These lenders and other creditors of HAGL had earlier reached an agreement to extend repayment terms for the group, believing that objective causes were behind the hardship of their borrower.

The banks said HAGL’s troubled operations are due to a volatile market and the group is only experiencing liquidity problems rather than an inability to repay debts.

According to BIDV, HAGL is totally capable of repaying all its debts if it sells its entire rubber plantation project spanning more than 50,000 hectares along the Vietnam-Laos border.

The creditors also said in the proposal sent to the central bank that they would agree to restructure several debts for HAGL and reduce or exempt interest on certain liabilities.

The SBV did not say when it would submit the proposal to Prime Minister Nguyen Xuan Phuc for his approval.

The firm currently invests in real estate, rubber, sugarcane, cattle and football – running a top-flight football club of the same name and owning a training academy backed by English giants Arsenal.

Following the negative audit results, HAGL chairman Duc, known as one of Vietnam’s richest tycoons, said in mid-April that his company is operating normally and will improve once an ongoing restructuring process is completed.

The tycoon has also admitted that most of the difficulties stemmed from HAGL’s rubber operation, with prices falling to $1,100 from $5,500 at the time he became involved in the business.

The magnate reiterated that except for rubber, his business is operating normally across all other sectors.

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