Novaland to raise $563M through share issuances

By Tat Dat   January 2, 2024 | 09:15 pm PT
Novaland to raise $563M through share issuances
A section of Novaland's resort property project in Binh Thuan Province’s Phan Thiet City in May 2021, before the market decline. Photo by Novaland
Property developer Novaland plans to issue 1.37 billion shares to raise a minimum of VND13.7 trillion (US$563 million) to pay off and restructure debts.

It will issue 200 million new shares with a one-year lockup period to up to five professional stock investors and 1.17 billion bonus shares to existing shareholders at a ratio of six for 10, meaning they can buy six shares for every 10 they own, according to a plan recently approved by its board of directors.

Novaland expects to issue the shares at a minimum price of VND10,000 within this year, and the price and timing will be announced later by the board.

The issuance will raise at least VND13.7 trillion, which will be used to pay debts, overheads and wages.

Novaland also aims to allocate some of the funds to its subsidiaries to fund projects.

It had planned a private placement of 975 million shares to strategic investors and professional stock investors and a rights issue of 1.95 billion bonus shares before reducing them to the current numbers.

To restructure its debts, the company has also been negotiating with debtors to roll over bonds or repay them with other assets.

It has also reorganized its operations, prioritizing nearly completed projects to quickly hand them over to buyers and highly liquid projects.

At a meeting November with Prime Minister Pham Minh Chinh, Novaland CFO Duong Van Bac had said the worst was over for the firm and it had completed 80% of its restructuring plan.

It currently has four main projects in HCMC, Binh Thuan Province’s Phan Thiet City, Dong Nai and Ba Ria-Vung Tau provinces.

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