NovaGroup offers 150 mln Novaland shares in business restructuring

Vietnamese conglomerate NovaGroup has registered with the Ho Chi Minh Stock Exchange (HoSE) to sell 150 million shares of its property developer Novaland as part of its restructuring.

The transaction is set to take place between November 30 and December 29, the HoSE said in a notice.

The deal would mean NovaGroup’s ownership at the major property developer would drop to 560.93 million shares or 28.768% of Novaland’s chartered capital.

HCMC-based NovaGroup said the deal aimed at placing its financial health at a safe level in its restructuring strategy approved by the board of directors.

The multi-business group added the business restructuring’s goal was to ensure stable production and business activities. NovaGroup has been working with leading consulting firms like EY Vietnam and KPMG to overall assess its current situation and work out comprehensive restructuring solutions.

Notably, NovaGroup said it “has successfully negotiated with investors and organizations with sufficient financial capacity” to join the transaction for a part of the total of shares.

“This is a positive signal to promptly supplement capital for business activities of the group in the coming time," NovaGroup said but did not disclose the name of the investors or their holding targets.

Novaland is listed on HoSE as NVL. Between October 14 to November 11, NovaGroup bought 1.822 million NVL shares out of eight million shares registered. Between October 14 and November 3, Bui Cao Nhat Quan, son of NovaGroup chairman Bui Thanh Nhon, bought two million NVL shares, raising his holdings at Novaland to 83.24 million shares, or 4.269% of its chartered capital.

Recently, Novaland’s board of directors approved a plan to issue shares to its bondholders. Under the plan, five bonds with a par value of $200,000, equivalent to more than VND23 billion owned by Citigroup Global, will be converted into shares at the price of VND85,000 ($3.43 now) each share.

These bonds were part of Novaland’s issuing 1,500 convertible bonds on July 16, 2021 to international investors, arranged by the Bank of New York Mellon and Credit Suisse, which were also issuance agents.

Citigroup Global invested $1 million buying some of these bonds, receiving an annual coupon rate of 5.25%. The initial conversion price was VND135,700 per share, then adjusted to VND85,000 on January 19, 2022.

NVL shares closed Thursday at VN21,950 ($0.88), down 68.6% compared to that at the beginning of this November.

One of the most outstanding projects of Novaland is The Grand Manhattan. This is one of the first seven projects in Ho Chi Minh City to have legal obstacles removed by authorities.

Amid the limited real estate supply in the city center and nearly-closed capital sources, the continued implementation of the project is considered a bright spot, helping investors gain more confidence in the recovery of the market, as well as supplementing the supply of high-quality housing for HCMC.

For Novaland, the implementation of The Grand Manhattan in the context of a challenging market once again affirms the value of the project as well as the group's tireless efforts in recent times.

The apartment-trade-service complex is being built on 14,000 square meters at a two-front prime location in the Co Giang - Co Bac area in the heart of District 1. Once completed, the project will provide the market with more than 1,000 apartments full of luxurious and modern utilities, contributing to quenching the "thirst" for high-class housing and serviced apartments in the country's leading economic hub.

Basic infrastructure such as the foundations, basements and floors 1-28, as well as some amenities have already been completed. The contractor Ricons will embark on construction right after the restart event, and ensure progress and quality, striving to hand over houses to buyers in the fourth quarter of 2024.

Besides The Grand Manhattan, Novaland is also negotiating with financial partners and construction contractors to implement a series of key projects such as NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City and other projects in downtown HCMC.