Novaland seeks bond repayment delay

The company could not repay the debts on time because property credit is being tightly controlled under a requirement by the State Bank of Vietnam (SBV) and its cash is being locked at banks, Chairman Bui Thanh Nhon said in a letter to bond holders.

Changes in policy and legal implementations concerning property and finance (including bonds) have partly affected the market and the short-term cash flow of businesses, including Novaland, he said.

"Under a force majeure circumstance," said Nhon, "we hope to continue to receive your support."
Nhon said the company is working to arrange the money to pay the interest on the repayments.

Holders could also exchange the bonds for a stake in projects that the company is developing, he added.

Dallas Vietnam Gamma Ltd., one of Novaland bond holders, on Friday agreed to exchange the bonds for a stake in two subsidiaries of Novaland.

Nhon also said that Novaland is being restructured under the consultancy of many partners, both domestically and internationally.

The company is committed to restarting its projects and untangling legal knots to complete them and hand over to customers, he said.

The company is also willing to negotiate with bond holders and lenders and consider their proposals, he added.

By the end of last year Novaland had a capital of VND257 trillion ($10.8 billion), in which 82.6% came from debts.