Vietnam's leading property developer Novaland completes buyback of $271 mln in bonds

Novaland, a major real estate developer in Vietnam, has completed the settlement of 21 bond packages worth a total of VND7 trillion ($271.4 million) after three phases, reducing its short-term bond debt to nearly VND17.3 trillion ($670.2 million).

Novaland, listed on the Ho Chi Minh Stock Exchange (HoSE) as NVL, has just announced the repurchase of bond package NVL2020-03-340 with a total repurchase value of VND340 billion ($13.17 million).

Previously, on January 6, the firm had reported its buyback of five NVL2020 bond packages with a total value of VND1.55 trillion ($60 million). On February 4, it continued to repurchase another 15 NVL2020 bond packages totalling VND5.11 trillion.

These bond packages were issued via VPS Securities, with a term of 36 months and maturity in early 2023.

According to the audited 2024 consolidated financial statements, Novaland had short-term borrowings and financial lease obligations totaling VND37 trillion ($1.43 billion), up VND6 trillion from the beginning of the year.

Long-term borrowings and financial lease obligations stood at VND24.59 trillion ($952.2 million), down more than VND2 trillion. Of this, the company recorded VND22.73 trillion in bonds maturing this year and VND14.58 trillion in long-term bonds.

Following the buybacks, Novaland’s outstanding short-term bond debt now stands at VND17.3 trillion ($670.2 million). Major bond packages include VND3.43 trillion issued through SSI Securities, VND5.59 trillion through Petrovietnam Securities, and VND6.44 trillion through MB Securities.

In addition, Novaland holds an international convertible bond package valued at VND8.2 trillion (approximately $317.52 million). This package was initially issued at $300 million to international investors, with The Bank of New York Mellon – London branch serving as the trustee, and UBS AG’s Singapore branch (formerly Credit Suisse AG’s Singapore branch) acting as the issuing agent.

The initial conversion price was set at VND135,700 ($5.26) per share. Following the completion of a restructuring plan on July 5, 2024, the outstanding amount increased to $320.9 million. The bonds are set to mature on June 30, 2027, with an annual coupon rate of 5.25%. The conversion price was reduced to VND36,000 per share.

Prudent business plan

In 2024, Novaland recorded revenue of VND9.07 trillion ($351.4 million), nearly double that of 2023. Of this, net revenue from sales reached nearly VND8.36 trillion, up 104% year-over-year, primarily from project handovers. Net service revenue hit VND717 billion.

However, it posted a loss of VND4.4 trillion ($170.5 million) – its first-ever annual loss. The loss was attributed to provisions made in the 2024 semi-annual report, based on the auditor's independent assessment, related to arising financial obligations at the Lakeview City project in Ho Chi Minh City.

CEO Duong Van Bac stated that Resolution No. 170/2024/QH15 from the National Assembly, effective April 1, is expected to address land use fee issues for the project. Novaland may be able to reverse provisions amounting to trillions of VND (VND1 trillion = $38.73 million) related to the project this year.

Novaland’s leadership plans to present to the 2025 AGM two business scenarios for this year, both of which expect the company to report a loss. Net revenue is projected to be around VND10.45 trillion or VND13.4 trillion ($519.4 million), with after-tax losses of VND12 billion or VND688 billion ($26.67 million).

The company’s representative emphasized that the most significant factor affecting its performance is the progress in resolving legal issues for its projects. As such, the two proposed scenarios for 2025 have been developed with caution, based on this progress. These plans also consider potential adverse factors, especially given the ongoing challenges in the real estate market.

In the stock market, NVL closed Wednesday at VND8,100 ($0.31) per share.