Property developer Novaland's stock green-lighted to resume margin trading

The ticker of major real estate developer Novaland, NVL, has been removed from the list ineligible for margin trading at the Ho Chi Minh Stock Exchange (HoSE).

The move followed the firm posting profits in its 2023 audited consolidated financial statements.

In April 2023, NVL had margin trading disallowed because the company delayed submitting its 2022 audited financial statements. The status was then maintained when the parent company recorded negative after-tax profit in the 2023 semi-annual consolidated financial statements.

According to consolidated financial statements for the whole 2023, the real estate developer enjoyed net profits of VND606 billion ($24.2 million), down 72% compared to the previous year, but making the stock eligible to be granted margin trading privilges again.

NVL's removal from the list will allow securities companies to grant margins to the stock again, creating favorable conditions for trading and increasing liquidity.

According to a new NVL release, 25 bondholders holding international bonds worth $284 million have agreed to extend the maturity date and have payment of interest delayed. They can convert the bonds into NVL shares at the initial price of VND40,000 ($1.59). The figure accounts for 95% of total outstanding debt.

At the end of 2023, the group had short-term debts of VND30,937 billion ($1.23 billion) and long-term debts of VND26,775 billion ($1.06 billion), mainly bond debts.

Novaland said that by the time its 2023 audited consolidated financial statement was approved, it had repaid VND644.8 billion ($25.65 million) and was negotiating debt restructuring with banks and domestic and foreign bondholders.

Domestic commercial banks have committed to providing financial support for the company to implement projects for on-schedule handovers, with VND2,785 billion ($110.78 million) disbursed last year. The group’s board of directors believe that it will obtain new credit worth VND15,816 billion ($629.12 million) in the next 12 months.

Novaland will also sell assets for an estimated VND2,870 billion ($114.16 million) to make debt repayments. Its leadership estimate that the sale will be completed within the next 12 months.

NVL closed Thursday at VND17,500 ($0.7) per share, up 1.74% from the previous day.