International bondholders demand 'huge' debt, what does Novaland say?

No Va Real Estate Investment Group Corporation (Novaland, Code NVL) has just announced that it has had discussions with a group of bondholders regarding the debt of a batch of international convertible bonds worth nearly 300 million USD, currently listed in Singapore.

Due to liquidity difficulties, Novaland has not been able to fulfill its obligation to pay interest of 7.8 million USD on time. The company's leaders said they are negotiating with the bondholder group Ad Hoc Group on a restructuring plan that is suitable for its current capacity and business recovery roadmap. The negotiation process is being consulted by international and domestic consulting firms such as Deloitte, Sidley Austin LLP and YKVN.

"In the context of limited resources, Novaland commits to always making efforts to negotiate and resolve in a receptive spirit with the desire to find the optimal solution to ensure the interests of the bondholder group," Novaland's announcement wrote.

In the financial report, Novaland is one of the units participating in mobilizing bonds with large value. The total face value of short-term bonds, although narrowed, was still more than 14,132 billion VND at the end of the second quarter (all issued to domestic securities companies and banks).

Novaland is facing difficulties with many bond lots. (Photo: Duy Anh)

Meanwhile, the total face value of long-term bonds increased rapidly to nearly VND28,993 billion. Notably, there was a batch of international bonds (with a converted value of nearly VND7,092 billion) issued to foreign partners, arranged and issued by Credit Suisse AG (Singapore branch).

This international bond is expected to mature on July 16, 2026. The interest rate that Novaland must pay to bondholders is 5.25%/year, every 6 months. The bonds are unsecured but can be converted into NVL shares at an initial conversion price of VND135,700/share (equivalent to nearly 33,916 shares/bond) and will be adjusted according to the market.

Previously, according to Business Wire, Ad Hoc Group - representing the bondholder group holding more than 75% of the above 300 million USD bond lot said that there would be new moves if Novaland did not negotiate debt restructuring in good faith.

Bank of NY Mellon (USA) has also issued several notices of default, most recently on July 17, related to a late coupon payment due on July 16, 2023. Although the negotiation process has reached a consensus on debt deferral, the group said it has not yet received goodwill cooperation.

Novaland representative said that in the difficult macro conditions, revenue and the ability to mobilize new capital are significantly affected. Cash accounts in projects are always under close supervision of banks for the purpose of project development.

As a result, Novaland is having difficulty making payments to domestic and foreign lenders as planned. The company is currently making efforts to restructure its debt and negotiate appropriate solutions to ensure the harmony of interests with bondholders and lenders.

The leaders of this real estate company hope to have more time for the business to recover; at the same time, they hope to receive support from creditors and bondholders to soon stabilize business operations and fulfill financial obligations to bondholders and related parties.

After a period of overcoming difficulties for the real estate industry, Novaland has begun to show signs of recovery. Many projects have had their legal and investment procedures resolved, as well as NovaWorld Ho Tram, Aqua City, NovaWorld Phan Thiet, The Grand Manhattan... restarted with the support of financial partners such as TPBank, MBBank, VPBank, contractors...

Novaland explains about the decrease in profit, doubts about its ability to continue operating Novaland, chaired by Mr. Bui Thanh Nhon, has just explained about the difference in after-tax profit in the semi-annual consolidated financial report and doubts about its ability to continue operating.

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