Major housing developer Novaland plans to issue 2.9 billion shares

Novaland wants to issue more than 1.9 billion shares to existing shareholders and offer more than 975 million shares via private placement to expand capital by nearly VND30,000 billion ($1.27 billion).

The company, listed on the Ho Chi Minh Stock Exchange as NVL, has announced a document to ask for shareholders' written opinions, which is expected to be conducted from March 10-21, 2023.

Specifically, Novaland's board of directors submitted to shareholders a plan to issue more than 975 million individual shares at a price of not less than VND10,000 ($0.42) per unit for professional securities investors and strategic investors.

The company plans to use the proceeds of VND9,750 billion ($411.8 million) for its subsidiaries to restructure debts and paying off the group's due debts; implementation of projects in which its subsidiaries are investors; payment of taxes and fees to the state; and replenishment of working capital.

It plans to issue an additional 1.95 billion shares to shareholders (shareholders who own one share have the right to buy one new share), with the offering price to not be lower VND10,000 per share.

The minimum proceeds of VND19,501 billion ($823.69 million) will be used for debt restructuring and payment of due debts of the company; payment of salary costs for staff; general operating costs; and implementation of projects invested by the company.

The implementation time of the above two plans is in 2023 or according to the decision of the board of directors after the State Securities Commission issues a certificate of registration for the offerings.

In case both issuance plans are approved and implemented, Novaland's charter capital will increase by about 2.5 times, from nearly VND19,500 billion ($823.65 million) to VND48,700 billion ($2.05 billion). The company will then become the biggest property developer in term of charter capital on Vietnam's stock exchange, before Vinhomes (VND43,544 billion), Vingroup's subsidiary.

NovaGroup chairman Bui Thanh Nhon officially became chairman of Novaland on February 3, continuing to drive the developer’s entire restructuring process. Prior to that, he had left the position to Bui Xuan Huy to focus on NovaGroup’s business strategy.

Novaland reported consolidated after-tax profit of more than VND2,293 billion ($97.78 million) in 2022, down 34% year-on-year and meeting just 35.2% of its target. The company earned consolidated net revenue of VND11,152 billion ($475.6 million), down 25% and reaching just 31% of its target.

As of December, 31, 2022, Novaland's total assets stood at more than VND257,365 billion ($10.98 billion), up 27.5% compared to the end of 2021. Of this, inventory accounted for nearly VND134,485 billion ($5.74 billion), mainly from real estate under construction with VND122,559 billion ($5.23 billion).

One of the most prominent projects of Novaland is the NovaWorld Ho Tram which covers 1,000 hectares along the sea route from Loc An to Binh Chau in the southern province of Ba Ria-Vung Tau. With the inauguration of subdivisions such as The Tropicana, Wonderland, Habana Island, Morito and Binh Chau Onsen, NovaWorld Ho Tram has officially been put into operation.

Located in a central position in the series of NovaWorld Ho Tram subdivisions, Wonderland comprises commercial and service areas; sea entertainment amenities; four-star hotels managed and operated by international brands; and more than 270 second homes including detached villas, duplex villas, quadridetached villas, seaside townhouses and shophouses.

Inspired by Western fairy tales, Wonderland - NovaWorld Ho Tram recreates a colorful world with an impressive and unique design style bearing the sound of a tropical seaside wonderland.