Unable to pay interest on $320 million bond package, Novaland continues to negotiate debt extension

Despite great efforts, Novaland has not been able to arrange enough funds to fulfill its interest payment obligation on January 16 for the internationally listed convertible bond package worth 320 million USD.

Despite great efforts, Novaland has not been able to arrange enough funds to fulfill its interest payment obligation on January 16 for the internationally listed convertible bond package worth 320 million USD.

No Va Real Estate Investment Group Joint Stock Company (Novaland; HoSE: NVL) has just announced information about the delay in paying interest on internationally listed convertible bonds worth 320 million USD.

Continue to negotiate debt extension with bondholders

Novaland said that in 2024, the Vietnamese real estate market has had new bright spots and is closely following the recovery process, but there are still many difficulties.

In particular, 2024 is a challenging year for real estate corporate finance with many pressures on corporate bond maturity, including Novaland, causing recovery efforts to not really achieve expectations.

NovaWorld Phan Thiet project is expected to complete land use fee payment decisions from April 2025. Photo: Le Toan

Therefore, regarding the USD 300 million international convertible bond lot listed on the Singapore Exchange (SGX), the restructuring plan for this international bond package was agreed in July 2024, with the payment date being the bond maturity date in June 2027 or the early redemption (if any) in the future.

However, in the context of general market difficulties, Novaland's revenue was significantly affected, causing difficulties in paying lenders as planned.

Therefore, despite great efforts, Novaland has not been able to arrange enough funds to fulfill its interest payment obligation on January 16. Novaland has also proposed to bondholders a plan to extend interest payments to suit the current situation and the Company's capabilities.

Novaland said that in the spirit of openness and ensuring the principle of fair treatment for all investors, Novaland has been making efforts to implement many solutions to ensure the rights of bondholders, and is in the process of negotiating with bondholders of this international bond package.

In the final stage of the restructuring process, Novaland needs more time to recover, therefore, the Company hopes to receive understanding and sharing from bondholders to stabilize business operations and soon fulfill obligations to bondholders.

Previously, Novaland also adjusted the price and conversion rate of this 300 million USD bond package. From January 5, the new conversion price is 36,000 VND/share, according to the fixed exchange rate at the time of conversion of 24,960 VND/USD, 10% lower than the initial conversion price (40,000 VND/share). The new conversion rate is 149,038 shares/bond.

Aqua City is expected to complete its 1/500 planning in July 2025.

After two years of drastic restructuring, Novaland has achieved many increasingly clear changes in its business operations. The Company's financial situation is currently recording positive points with the total outstanding debt to Novaland's lenders as of December 31, 2024 having decreased or having a solution with a value of nearly VND 29,700 billion compared to December 31, 2022.

In 2024, many Novaland projects have achieved important legal breakthroughs. However, the work of removing legal obstacles for the projects has not yet reached the desired progress, affecting sales as well as product delivery to customers, thereby causing the cash flow from the projects to not reach the set target, causing the payment to bondholders to not be as planned.

Currently, the company is focusing all resources to try to gradually overcome and speed up the progress of legal completion at key projects.

In particular, the Aqua City project is expected to complete the detailed planning 1/500 and sales licenses for subdivisions in accordance with the new planning, expected in July 2025.

NovaWorld Phan Thiet project is expected to complete decisions on land use fee payment from April 2025, in order to quickly continue construction activities, handover, and collection of product sales proceeds of the projects.

“This is a solid foundation for fulfilling obligations to all stakeholders,” Novaland emphasized.

Source: https://baodautu.vn/batdongsan/chua-the-thanh-toan-lai-goi-trai-phieu-320-trieu-usd-novaland-tiep-tuc-dam-phan-gian-no-d241245.html