This bond lot was raised by Novaland from 2021 to develop key projects and increase land fund, including the Aqua City project in Dong Nai - Photo: NGOC HIEN
Novaland’s $300 million international bond has had its maturity extended and can be converted into Novaland shares at an initial price of VND40,000. Meanwhile, many real estate giants also have trillion-dollar bonds maturing this year.
Novaland completes $300 million bond deal
On July 6, No Va Real Estate Investment Joint Stock Company (Novaland) announced that the company has completed the restructuring agreement of a convertible bond package worth nearly 299 million USD (about 7,500 billion VND) with an interest rate of 5.25% (due in 2026) with the right to convert into common shares.
In the coming time, bondholders can also convert bonds into Novaland shares with an initial conversion price of VND40,000 per share, the conversion ratio is 134,135 shares for one bond.
According to the agreement, the principal balance after interest is nearly 321 million USD. The payment date is the bond maturity date in June 2027 or the future early repurchase. The repurchase value is calculated as 115% of the original principal (minus the conversion into shares) plus deferred interest and accrued interest. In which, deferred interest will be calculated at 5.25% per year as the principal.
Novaland representative said that the completion of restructuring the above bond lot, along with many positive signals about liquidity, will help reduce financial pressure due to legal entanglements and market fluctuations that have affected Novaland's business activities in recent times.
This bond was successfully issued by Novaland in 2021, listed on the Singapore Stock Exchange (SGX), unsecured, without warrants and with an initial maturity date of 2026. Each bond has a face value of USD 200,000 with an interest rate of 5.25% per year and has the right to convert into shares at an initial price of VND 135,700 per share.
Due to difficulties in the real estate market and liquidity, Novaland requested to postpone the payment deadline and reached a restructuring agreement with bondholders, and also received approval from the Singapore International Commercial Court (SICC) at the end of April.
However, this real estate company has also repeatedly postponed the completion of the restructuring agreement for this bond package as well as repeatedly lowered the conversion price. As for domestic bond lots, this real estate company has also repeatedly delayed debt and agreed to postpone payment deadlines.
In the 2023 audited financial report, the auditing unit PwC noted that Novaland's ability to continue operating depends on its ability to pay or restructure loans, maturing bonds and implement other solutions to generate cash flow to finance business operations.
More than 90 real estate businesses have trillion-dollar bonds this year
According to the Ministry of Finance, by the end of 2023, there were 182 real estate enterprises with outstanding bonds, with a total outstanding debt of nearly VND 351,400 billion. In 2024, there were 92 real estate enterprises with corporate bonds maturing, with a total maturing debt of about VND 99,500 billion.
The list of enterprises with bonds due in the thousands of billions this year includes: Aqua City Company Limited, Vietnam Construction and Import-Export Corporation, Van Phu - Invest Investment Joint Stock Company, Nova Real Estate Investment Group Joint Stock Company, Hai Phat Investment Joint Stock Company, Hung Yen Urban Development and Investment Company Limited, Geleximco Group, and Industrial Development and Investment Corporation.
In addition, the list of real estate enterprises "holding debt" of thousands of billions of bonds has many notable names such as: Van Truong Phat Investment and Construction Joint Stock Company about 10,000 billion VND, Viet Han Trading, Advertising, Construction, Real Estate Joint Stock Company about 9,700 billion VND, TNR holdings Vietnam Real Estate Investment and Development Joint Stock Company about 9,300 billion VND, Nova Real Estate Investment Group Joint Stock Company about 6,500 billion VND, Hano-vid Real Estate Joint Stock Company about 9,500 billion VND, Hung Yen Urban Investment and Development Company Limited about 7,200 billion VND, Thai Son Long An Joint Stock Company about 8,700 billion VND, Van Phu - Invest Investment Joint Stock Company 1,300 billion VND, Nam Long Investment Joint Stock Company about 3,100 billion VND...
According to data from the Vietnam Bond Market Association (VBMA), in the second half of 2024, it is estimated that there will be about VND 139,765 billion worth of bonds maturing (equivalent to nearly USD 5.5 billion), of which the majority are real estate bonds with VND 58,782 billion, equivalent to 42%.
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