Novaland goes for $1.2B more capital

By Minh Son March 11, 2023 | 04:09 pm PT

An artist's impression of a residential project developed by Novaland in Ho Chi Minh City. Photo courtesy of Novaland

Vietnam’s fourth-largest property developer Novaland wants to increase its capital by VND29.25 trillion (US$1.24 billion) by issuing 1.95 billion shares to existing shareholders, and another 975 million in private placement.

Novaland’s existing shareholders would receive the new shares with a 1:1 ratio at a the selling price of at least VND10,000, if the plan works.

The firm’s strategic investors and professional securities investors would access the shares prices not lower than their par value.

If the share issuance is successful, Novaland’s charted capital will surge to VND48.75 trillion, becoming Vietnam’s largest listed property developer.

The proceeds are expected to be used by Novaland to pay and restructure debts, increase stakes in subsidiaries, pay general operating expenses and taxes, raise its working capital, and implement projects.

The share issuance is expected to take place this year or at a time decided by the board of directors, when and if it is approved by the State Securities Commission.

Late last month, Novaland asked its bond holders for an extension of two months in repayment of a VND1 trillion note originally due on Feb 12.

Last year Novaland reported revenue of VND11.15 trillion, and an after-tax profit of VND2.29 trillion, marking respective year-on-year declines of 25% and 34%.

By the end of 2022, the company had VND257 trillion in capital, of which 82.6% came from debts.