Bondholders demand additional collateral from Novaland when stocks reach bottom

According to the recently announced resolution, bondholders of bond lot NVLH2123010 rejected Novaland Group’s (NVL) proposal not to mortgage additional collateral assets. Additional mortgage assets include 47 certificates of land use rights, ownership of houses and assets attached to land in Cu Lao Phuoc Hung Urban Area. These are plots of land and houses with an area of ​​several tens to thousands of square meters belonging to the Aqua City project (Dong Nai).

The reason given by bondholders is that the value of NVL shares is continuing to decline. This affects the value of the bond’s collateral assets. They requested Novaland to complete procedures for signing a mortgage contract and registering a secured transaction as soon as eligible.

The above batch of bonds was issued in September 2021, worth VND 1,000 billion. Initially, the maturity date was March 2023 with an interest rate of 10.5% per year, then it was agreed to move to March 2025 with a new interest rate raised to 11.5% per year. This is a mobilization to increase the scale of Novaland’s operating capital and is guaranteed by NVL shares.

In fact, in recent times, NVL has fallen into a strong and prolonged period of adjustment. Closing the session on October 16, this code decreased by 2.4% to 10,200 VND per unit, nearly equal to par value. Compared to the beginning of the year, Novaland shares have dropped more than 39% and are at the lowest price in history. NVL is also on the list of ineligible for margin trading on HoSE.

According to the reviewed semi-annual consolidated financial report, Novaland’s after-tax loss was more than VND 7,327 billion, 6.7 times the profit deficit in the same period last year. The above loss creates a huge difference compared to the data in the self-made report that the company profited nearly 345 billion VND thanks to financial revenue. This is also a record loss in the operating history of this real estate investor.

NVL explained that the above profit shortfall mainly comes from the provisioning requirements of the auditing unit PwC, of ​​which the majority comes from the provision for rent and land use payable calculated according to the land price plan. 2017 of the Lakeview City project (Thu Duc City, Ho Chi Minh City). The company believes that the authorities calculating the land price for this project are mistaken and they petitioned the People’s Committee of Ho Chi Minh City for consideration and handling. The above provision can be adjusted and reversed when conditions are met in the future.

Recently, NVL stock price was also affected by the information that Ms. Truong My Lan demanded 2,500 billion VND in cash to overcome the consequences of the case related to the Viet Phat industrial and urban park project (Suntec City). ). Regarding this, Novaland declared that Ms. Lan’s proposal was “completely baseless”.

Novaland said it will continue to deploy many solutions to create enough cash flow to fund business activities. They are implementing the construction of key projects such as NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City… This enterprise is also continuing to restructure its finances, gradually fulfilling its commitments to customers.