Novaland will issue more than 1.3 billion shares to pay debt

About VND 13,700 billion from selling 1.37 billion shares will be prioritized by Novaland to restructure debt and pay due payables.

Novaland (NVL) has just approved a plan to issue 200 million shares to professional securities investors, with a one-year transfer restriction. The company also sold more than 1.17 billion unrestricted shares to existing shareholders at a rate of 60%, meaning 10 shares "exchanged" for 6 units.

The offering price will be decided by the Board of Directors, but not lower than VND10,000 per unit. Novaland plans to issue the above shares this year, or at another time decided by the Board of Directors.

Thus, if the issuance is successful, NVL can collect at least about VND13,700 billion. The above amount is prioritized for debt restructuring and payment of payables (including principal, interest and other fees). The next priority is to pay salaries to employees and general operating costs. In addition, this enterprise also wants to use the money to contribute capital to subsidiaries, implementing projects in which NVL is the investor.

According to the decision, this offering will have a maximum of 5 professional investors participating. The number of shareholders will be determined on the last registration date to exercise the right to purchase. By the end of November, NVL had more than 78,700 individual and institutional shareholders.

A subdivision of NVL's resort real estate project in Phan Thiet (Binh Thuan). Actual photo of the project in May 2021, before the market "froze". Photo: Novaland .

Previously, the company had planned to issue 975 million shares privately to strategic investors and professional securities. Existing shareholders will have the right to buy an additional 1.95 billion shares. Compared to the original intention, the number of shares issued decreased by more than 1.5 billion units, and the expected revenue also decreased by more than VND15,500 billion.

Recently, Novaland and the Novagroup ecosystem have focused on debt restructuring. They have actively negotiated to extend, change interest rates or swap debt to other assets, as well as seek to raise capital to fulfill financial obligations.

Mr. Bui Thanh Nhon's company also rearranged, prioritizing projects that are about to be completed to hand over products to customers and selected projects with high liquidity to speed up legal procedures to catch up with the recovery of the real estate market. At a meeting with the Prime Minister in mid-November 2023, CFO Duong Van Bac said that the group had passed the most difficult time and was 80% of the way to restructuring.

Currently, this investor has 4 main, large-scale project clusters in Ho Chi Minh City, Dong Nai, Ba Ria - Vung Tau and Novaworld Phan Thiet.

Siddhartha

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