Vietnam restaurant chain Mon Hue has closed down without notice, evidently unable to pay its debt.
Restaurants under the Mon Hue brand along with sister chains including Pho Ong Hung and 99 House of Pho, have been shuttered and the company’s websites and social media channels have been switched off. Many of the abandoned stores in downtown Ho Chi Minh City already have for-lease signs on them.
The company’s headquarters has been abandoned.
The exact number of stores in the company’s network is hard to clarify. By the end of 2015 the company operated 110 and then embarked on a massive expansion program which may have peaked at 200 before closures began. Local media reported that 80 closed this week, but there is evidence that a long-term cull has been underway for at least several months.
Several Mon Hue employees and suppliers have told local news media that they haven’t been paid “for months”.
“Since about a week ago, the company stopped taking our supplies or paying for them. We couldn’t the procurement managers, directors of Mon Hue or its owner, Huy Nhat,” said Thuan, a supplier of the restaurant.
DealStreet Asia reported today that private equity investors in Huy Vietnam have commenced a lawsuit in People’s Court of HCMC on behalf of the business against its founder and chairman Huy Nhat.
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According to VN Express, Mon Hue achieved a profit of VND300 million ($12,950) in 2016, but since then losses have accumulated to almost VND107 billion ($4.62 million) as expansion costs rose much faster than revenue.
Meanwhile, dozens of the restaurant group’s suppliers owed money gathered in front of Ho Chi Minh City police headquarters to file complaints against the company, alleging Mon Hue had committed fraud.
Staff, landlords, and suppliers have been left unpaid. Trade suppliers are owed at least US$430,000 including a production company whose $55,940 debt traces back three months. Others reduced their exposure by ceasing supplies but a promised installment repayment plan by Mon Huse was allegedly not honored.
In addition to enormous debts, Mon Hue Restaurant accounts have been frozen by Vietnam’s tax authority.
Mon Hue was operated by Nha hang Mon Hue Co, which is now wholly owned by Hong Kong-registered Huy Vietnam.
In late 2015, Huy Vietnam announced it was planning to list on the Hong Kong Stock Exchange. At the time it had already attracted US$65 million in investment from global investors such as AIF Capital Asia, Fortress Capital Asset Management, Welkin Capital, Prosperous Alliance and Templeton Emerging Markets Group. The company reported estimated it could raise up to $100 million from an IPO to fund expansion both inside and outside Vietnam. That plan was later abandoned.