Novaland completes first phase of restructuring, targets 'returning to growth' from 2027

Novaland, a leading real estate developer in Vietnam, said it has completed the first phase of its multi-year restructuring plan and aims to finish the entire program by end-2026, positioning the company to return to growth from 2027.

Novaland (HoSE: NVL) began restructuring in late 2022 after the country's corporate bond market froze following the Saigon Commercial Bank (SCB) scandal, triggering a liquidity crunch across the property sector.

The developer, which holds tens of trillions of VND (VND10 trillion = $379.5 million) in bond liabilities, moved to overhaul its organization, renegotiate with contractors, streamline operations, and resolve legal issues at key projects.

CEO Duong Van Bac told an event on November 15 that by Q3, the company had “basically completed” the first phase of restructuring. Legal obstacles at major projects have been cleared, allowing construction to resume at three flagship townships - Aqua City, NovaWorld Phan Thiet, and NovaWorld Ho Tram - with handovers accelerating.

Novaland said it has delivered nearly 6,000 units across ongoing projects including Aqua City, NovaWorld Phan Thiet, NovaWorld Ho Tram, and Sunrise Riverside. In Ho Chi Minh City, thousands of units have regained title certificates after prolonged delays, with more expected from 2026 onward.

Aqua City remains the group’s highest priority, with full construction completion targeted for 2026 and about 9,200 units scheduled for handover between 2026 and 2027.

Debt remains the main challenge

Despite legal progress, Novaland continues to face heavy debt and negative cash flow.

Reviewed financial statements for H1/2025 show continued losses, deeply negative operating cash flow, and instances where short-term debt obligations were not fulfilled on time.

As of September 30, total borrowings stood at more than VND64.2 trillion ($2.44 billion), including nearly VND29.6 trillion ($1.12 billion) in bonds. The company has repaid VND7.7 trillion ($292.2 million) of bonds since the beginning of the year.

Novaland said it is negotiating with lenders and bondholders to restructure both principal and interest. It has reached initial agreements covering VND14.48 trillion ($549.7 million), according to its 2025 reviewed financial report, with creditors willing to extend maturities and give the company time to stabilize operations.

The developer has also planned asset disposals worth VND28.38 trillion ($1.08 billion). It has already sold seven assets for VND13.51 trillion, signed preliminary agreements to sell five more assets worth VND7.67 trillion, inked memoranda on two assets totalling VND3.4 trillion, and received non-binding offers for another four assets valued at VND1.92 trillion.

Novaland will additionally convert part of its debt into equity. An extraordinary shareholder meeting in August approved the issuance of 168 million shares to swap VND2.65 trillion ($100.4 million) of debt owed to entities affiliated with the chairman, including NovaGroup, Diamond Properties, and Hoang Thu Chau. The conversion, priced at VND17,747 ($0.67) per share, is expected to take place between Q4/2025 and Q1/2026.

The company will later issue 151.8 million shares to convert VND6.07 trillion ($230.5 million) worth of bonds at VND40,000 ($1.5) per share. The swap covers 13 tranches of privately issued bonds, mostly outstanding since 2023. The converted shares will be subject to a one-year lock-up. Issuance is scheduled for 2026.

Executives said Novaland has also secured additional bank financing for project construction, with lenders disbursing and committing more than VND18 trillion ($683 million) in new credit lines, primarily supporting the continued build-out of Aqua City.