Vietnam’s leading carmaker Thaco, fully known as Truong Hai Auto Cooperation, has earmarked a hefty investment into HAGL Group, whose business is financially hit by the poor performance of its agriculture arm.

Both companies held a ceremony to announce their strategic cooperation in Ho Chi Minh City on Wednesday.

According to the agreement, Thaco has spent a total of more than VND7.8 trillion ($335.4 million) on buying a 35 percent stake in Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico), and acquiring a 51 percent controlling share in HAGL Land, its realty development arm.

The Vietnamese multi-sector firm HAGL Group’s total assets topped VND53 trillion ($2.28 billion) as of the end of the first quarter of this year.

The company is currently running its agricultural business on a total area of 80,000 hectares in different projects in Vietnam, Laos and Cambodia.

However, HAGL has fallen into a severe crisis, even losing liquidity, after its rubber projects were hit by slumping prices.

Even after having its debts restructured, the conglomerate still owes its creditors VND23 trillion ($989 million).

Following the Thaco-HAGL strategic cooperation, Tran Ba Duong, chairman of the carmaker, will be responsible for the overall restructuring of HAGL Agrico, he said at Wednesday’s event.

The restructuring will focus on three solutions - high technology application, information technology management and mechanization for all stages of the agricultural value chain, from cultivation to harvest, transportation, storage and processing, according to Duong.

On top of the VND7.8 trillion investment, Thaco is also committed to allocating another VND14 trillion ($602 million) to the agricultural and realty development projects of HAGL in Myanmar.

The investment will be used to restructure and expand HAGL’s agricultural land in Myanmar, and finance the second phase of a shopping center-hotel-apartment-office complex in Yangon.

Thaco will cooperate with realty developer Dai Quang Minh in the VND7.4 trillion ($318.2 million) complex project in Myanmar’s capital, scheduled for completion in 2020.

Speaking at Wednesday’s ceremony, Vietnam’s Prime Minister Nguyen Xuan Phuc hailed the strategic cooperation between Thaco and HAGL, saying the two will set an example of applying advanced technology to agriculture.

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