NovaGroup to sell stake in property subsidiary Novaland

By Phuong Dong   March 27, 2023 | 08:51 pm PT
NovaGroup to sell stake in property subsidiary Novaland
An artist's impression of a residential project developed by Novaland in Ho Chi Minh City. Photo courtesy of Novaland
NovaGroup wants to sell a 2% stake in Novaland, and if the transaction goes through, chairman Bui Thanh Nhon and his family will become minority shareholders.

In a notice sent to the Ho Chi Minh City Stock Exchange on Monday, NovaGroup said it would sell 38 million shares between March 30 and April 28 to balance its investment portfolio and restructure debts.

The announcement comes amid a sharp rise in the price of NovaGroup shares thanks to the deferral of its bond redemption, approval for capital hike and the nomination of two new directors. Novaland shares closed Monday at the ceiling price of VND12,700 ($0.54) and there were no sellers, a fourth straight day of gains.

At this price, the transaction is expected to fetch Nova nearly VND500 billion ($21.3 million).

But it will reduce NovaGroup’s stake to 27.43%. Nhon's family, including himself, his wife, two children and two related companies, will see their holdings fall to 50.72%.

Novaland's charter makes 51% the controlling stake.

NovaGroup, formerly known as Thanh Nhon Trading Co., Ltd., was founded by Nhon in 1992.

It underwent several rounds of restructuring. In 2007 two companies, Novaland Group in real estate and Anova Group in livestock and animal feed, were established.

In 2020 NovaGroup restructured for a second time and added three more corporations: Novaland, Nova Service (services) and Nova Consumer (consumer goods). A year later it set up three more companies, with Novaland remaining the main one.

The last time NovaGroup sold shares in Novaland was in November 2022 when it registered to sell 150 million shares but only managed to sell 98 million.

Novaland is Vietnam’s second largest listed property developer, according to Reuters.

It reported revenues of VND11.15 trillion and after-tax profits of VND2.29 trillion last year, 25% and 34% down from 2021.

It has capital of VND257 trillion, 82.6% of it from debt.

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