Novaland cuts debt by over $126 mln ahead of year-end through share issuance

Vietnam’s major property developer Novaland has reduced its outstanding debt by more than VND3,324 billion ($126.4 million) after issuing new shares to swap debt and convert bonds.

Novaland (HoSE: NVL) has issued a total of about 184 million shares to creditors and bondholders, lowering its liabilities by over $126.4 million, while raising its charter capital from VND20,476 billion to VND22,320 billion ($848.7 million).

The company on Wednesday announced it had issued 163.7 million shares to swap debt owed to major shareholders NovaGroup and Diamond Properties, with the total value exceeding VND2,577 billion ($97.98 million).

The swap price was set at VND15,747 ($0.6) per share. The privately placed shares will be subject to a one-year lock-up period.

Novaland said that during its most difficult period, major shareholders had supported the company by pledging shares as collateral for loans and bonds, helping it meet maturing obligations and maintain operations.

As the share price fell sharply and collateral was liquidated, those shareholders saw their ownership diluted, prompting the debt-to-equity swap approved at an extraordinary shareholders’ meeting in August.

Following the transaction, the combined ownership of NovaGroup, Diamond Properties, and the family of chairman Bui Thanh Nhon has risen back above 40%.

Also on Wednesday, Novaland’s board of directors approved the issuance of shares to convert part of its $335 million international convertible bond package.

A total of 133 bonds, valued at VND747 billion ($28.4 million), were converted at a price of VND36,000 ($1.37) per share, resulting in the issuance of about 20.7 million shares to four foreign investors.

At the end of the third quarter, Novaland reported short-term borrowings of VND31,934 billion ($1.21 billion) and long-term debt of VND32,439 billion, including VND29,601 billion in outstanding bonds.

Further deleveraging plans

In addition to the completed transactions, Novaland plans to issue 151.8 million shares to swap VND6,074 billion ($231 million) of bond debt at a price of VND40,000 ($1.5) per share, a plan approved by shareholders in August 2025.

The company has also secured shareholder approval for a convertible loan facility of up to VND10,000 billion ($380.2 million), with maturities ranging from one to five years.

Lenders may request conversion of part or all of the principal at a price set at no less than 115% of the average NVL share price over the 20 trading sessions prior to and including the final disbursement date, subject to adjustments under standard market conditions.

Novaland acknowledged that the measures would significantly dilute its shares but said they are necessary to support restructuring efforts, ease cash-flow pressure, and improve financial safety ratios.

Novaland shares ended 2025 at VND13,350 ($0.5), rebounding from around VND9,000 at the start of the year but still far below their pre-crisis peak of over VND80,000 before Vietnam’s bond market turmoil in late 2022.