Entering a new market cycle, real estate businesses are effectively utilizing the stock issuance channel to increase capital, repay loans, and invest in projects.
Recently, the Board of Directors of the Construction Development Investment Corporation (DIC Corp) approved a plan to offer 200 million shares to existing shareholders. Of the expected VND3,000 billion, DIC Corp will use VND1,135 billion to invest in the Cap Saint Jacques Complex Project Phase II and III; VND965 billion to invest in the Vi Thanh project; the remaining VND900 billion will be used to pay for two bonds due at the end of this year.
In fact, after a period of difficulty in capital management and legal deadlocks in projects, recently, many real estate businesses have begun to "create a foundation" to prepare for a new development cycle. To have the financial potential to implement the project, businesses have proposed plans to mobilize tens of thousands of billions of VND from investors in the stock market.
Novaland Group has just finalized a plan to offer nearly 1.2 billion shares to existing shareholders at a price of VND10,000/share. Notably, the shares after issuance are not subject to transfer restrictions.
If the issuance is successful, Novaland will collect more than VND11,700 billion. Novaland plans to use nearly VND10,600 billion to contribute capital to its subsidiaries; more than VND855 billion to restructure debt and pay part of payables; more than VND140 billion to pay salaries for staff and employees; and nearly VND139 billion to pay general operating costs.
On the eve of the 2024 Annual General Meeting of Shareholders, An Gia Real Estate Group presented to shareholders a plan to issue a maximum of more than 31.2 million shares to professional securities investors, with an issuance rate of 25%. However, at the General Meeting (May 14), the Board of Directors withdrew this proposal due to lack of preparation time and the company will announce it at an appropriate time. However, the general spirit is to increase capital to attract large investment funds.
Another enterprise is Dat Xanh Group, after successfully issuing 101 million shares to existing shareholders, with the proceeds of more than 1,220 billion VND, this enterprise continues to plan to issue more than 150 million shares, also to existing shareholders with a minimum price of 12,000 VND/share.
Of the proceeds of about VND 1,802 billion, Dat Xanh will use VND 221 billion to pay obligations related to bonds, VND 222 billion to supplement working capital, and the rest to pay debts for 2 subsidiaries.
In addition, Dat Xanh also wants to offer 93.5 million shares to professional securities investors at a minimum price of VND18,600/share. With at least VND1,739 billion in revenue, the Company will contribute capital and increase its ownership ratio in the subsidiary.
It can be seen that most businesses plan to raise capital from the stock market mainly to implement projects, while others restructure debt. This shows the ambition and optimism of businesses in the face of positive signals from the real estate market.
Issuing shares will help companies raise capital to expand their business, pay off debts due, serve investment purposes, etc. This source of capital does not constitute a debt that the business must be responsible for repaying like bonds or other mobilization channels, thereby significantly reducing the pressure on liquidity balance for businesses.
However, the issuance of shares and capital increase of many real estate enterprises taking place in the context of a gloomy market also poses many risks and challenges. Therefore, enterprises wishing to raise capital from the stock market are convincing investors with their efforts to restructure debt and set out a long-term prospect plan.
For example, An Gia has a cautious, step-by-step development strategy. The company aims to grow by 20% per year, launching 2,000 - 3,000 products to the market each year. With 10,000 products in the planned land fund, An Gia has enough room to develop for 3 - 4 years. The company will continue to buy 1 - 2 more projects each year and stick to its sustainable development roadmap.
As for Novaland, the restructuring results are bearing fruit. This year, the company plans to continue to generate revenue from key projects such as Aqua City, NovaWorld Phan Thiet, NovaWorld Ho Tram and housing projects in Ho Chi Minh City, with a consolidated revenue target of VND32,587 billion and after-tax profit of VND1,079 billion. The company has agreed to swap the value of debt with products with a total value of about VND2,500 billion, and negotiate to restructure the bond debt of USD300 million.
Mr. Pham Anh Khoi, Director of the Dat Xanh Services Institute for Economic - Financial - Real Estate Research, said that at this time, all parties are ready for the race to take the lead in the new cycle. In this race, the main participants are investors, brokerage firms and customers. In which, investors play a pioneering role.
Source: https://baodautu.vn/tan-dung-kenh-phat-hanh-co-phieu-de-tang-von-tra-no-vay-d215739.html
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