Property developer Novaland proposes bond repayment rescheduling

Major housing developer Novaland has proposed that in the next two months, it will join bondholders in paying the bond principal in accordance with actual company cash flow.

The company, one of Vietnam’s biggest issuers of corporate bonds, said it had made great efforts to pay the due interest of the bond batch NVLH212309 issued on August 12, 2021 and maturing on February 12, 2023.

“We proposed extending the bond principal payment deadlines in a suitable time, or swapping the bond principal with real estate products being invested and developed by the company,” it stated.

The company’s proposals were made following the force majeure events from the unpredictable fluctuations of the market and in accordance with the provisions of the bond issuance document, it said.

These proposed options meet legal regulations and are in line with the orientation of dealing with bond-related issues in the current context according to the draft amended Decree 65/2022/ND-CP on private placement of corporate bonds that the Ministry of Finance has just submitted to the government. These are also suitable solutions to ensure harmonized interests for bondholders in the current context.

According to Novaland, recent macroeconomic fluctuations, tightened credit and legal problems have affected and caused liquidity difficulties for real estate companies, including Novaland.

The company is drastically conducting comprehensive restructuring with the support and advice of many leading partners like EY-Parthenon and law firm YKVN to work out comprehensive shakeup solutions, focusing on core business activities.

“Above all, we are exerting efforts to ensure the interests of bondholders, customers and related parties. The company is also focusing on building and handing over real estate products in phases, gradually stabilizing production and business activities,” it noted.

The batch includes 10 million bonds with a par value of VND100,000 ($4.21), equivalent to the total mobilized value of VND1 trillion ($42.11 million). It has a term of 18 months, with fixed interest rate of 10.5% per year paid every six months.