Property developer Novaland reassures investors against rumors

Novaland, a leading Vietnamese property developer, has reassured its investors and partners that recent media reports and rumors "may not accurately reflect the status of the group’s indebtedness or payment".

"There have been certain unconfirmed media reports and market rumors in relation to the company’s current financial status, and other matters in connection with its indebtedness,” Novaland said in a Tuesday release.

“The chairman of the board of directors wishes to clarify that the contents of such media reports and market rumors may not accurately reflect the status of the group’s indebtedness or payment,” it said.

Credit Suisse AG - Singapore Branch and Citigroup Global Markets Ltd are among foreign shareholders of Novaland, listed on the Ho Chi Minh City as NVL. In June, a consortium led by global investment giant Warburg Pincus completed a $250 million investment in this Vietnamese developer.

All its fundraising activities have been implemented substantially in compliance with relevant regulations and rules in Vietnam, and none of the bonds are requested to be revoked by the State Bank of Vietnam or other regulators, the firm noted.

Novaland stressed it “has worked and will continue to work relentlessly to ensure delivery of completed properties pursuant to contractual arrangements entered into by the group and the continuation of construction progress in all of the megaprojects,” including Aqua City, NovaWorld Phan Thiet, NovaWorld Ho Tram, and residential projects in HCMC downtown.

The announcement said the company has completed certain project phases ahead of schedule as committed to its customers. It is implementing stringent cost-saving measures, including reducing noncore operations and expenses.

As for its financial health, Novaland said it has worked with financial partners, both domestic and international financial institutions.

The company will fully disclose information when appropriate in accordance with current Vietnamese rules on disclosure of securities information, regulations on corporate bond issuance, and the Rulebooks governing the listing, clearing, trading, and depository services of the Singapore Exchange, it added.

Earlier, on October 24, Novaland had said that rumors spreading on social networks about its projects and business operations were false.

"The rumors have negatively affected the corporation, its clients and employees," the Ho Chi Minh City-based developer said in a release.

On November 10, in a letter sent to stock market regulators, Novaland had said the price of its shares had hit the floor for five consecutive sessions due to market sentiment and macroeconomic conditions.

Novaland recorded consolidated after-tax profits of VND2,054 billion ($82.7 million) in the first nine months of the year, down 19% year-on-year. It earned consolidated net revenues of VND7,908 billion ($318.5 million) in the period, down 23.7%.

By September 30, 2022, the company's total assets were more than VND259.59 trillion ($10.45 billion), up 28.6% compared to the end of last year.

Novaland is one of the country's biggest issuers of bonds. Corporate bonds used to be the preferred source of capital for many businesses, especially real estate developers.

But the tightening of the corporate bond market following the arrests of Tan Hoang Minh and Van Thinh Phat leaders for their bond issuance violations, and the promulgation of Decree No. 65 with more stringent requirements on private placement of corporate bonds have made this avenue virtually closed.