Novaland's office in An Phu ward, District 2, HCM City. (Photo: Novaland) NoVa Real Estate Investment Group Joint Stock Company (Novaland, HOSE: NVL) hasjust announced that it has reached an agreement with its "bondholder"Dallas Vietnam Gamma Ltd. The companies have negotiated and reached anagreement to reduce the number of outstanding bonds and warrants through a swapagreement.
Accordingly, Dallas Vietnam Gamma Ltd will receive a portion of shares in twomember companies of Novaland, namely Thanh Nhon Real Estate Investment CompanyLimited and Mui Ne General Investment Joint Stock Company in exchange for thecancellation of a corresponding number of bonds and warrants.
Previously, in mid-2022, Dallas Vietnam Gamma Ltd bought 4,435 convertiblebonds and 185 warrant-linked bonds from Novaland. Novaland's consolidatedfinancial statements for the fourth quarter of 2022 showed that Dallas VietnamGamma is Novaland's bondholder with a long-term debt of 4.62 trillion VND (193billion USD) as of December 31, 2022.
BCG Energy Joint Stock Company – a member of Bamboo Capital Group Joint StockCompany (HOSE: BCG) also recently said that it had reached an agreement withinvestor Hanwa Energy Corporation Singapore Pte Ltd on changing the bondpayment term.
According to BCG Energy, considering changes in market conditions, the twoparties have negotiated to convert part of the bonds into debt with the finalpayment term being changed to June 30, 2023, instead of September 4, 2022.
As of December 31, 2022, BCG Energy had paid all the interest and VND45 billionof the principal to Hanwa Energy Corporation Singapore Pte. The remainingprincipal debt, equivalent to 3 million USD, has been agreed by BCG Energy andHanwha Energy to be settled under a joint agreement of both parties.Previously, on September 4, 2019, BCG Energy privately issued a convertiblebond package to Hanwa Energy Corporation Singapore with a value of 115.75billion VND.
In addition to actively negotiating with lending partners, some businesses alsoactively increased coupon rates for bond lots to stabilise investor sentiment.In addition, many businesses also plan to repurchase the issued bonds beforematurity.
According to a recent report by Vietcombank Securities Company (VCBS), byJanuary 2023, out of 1.19 quadrillion VND of corporate bond outstanding loans,the largest amount of outstanding loans belonged to the real estate industrywhich is accounting for 37%, followed by banks making up 32%.
VCBS also added that the volume of corporate bonds maturing in 2023 isestimated at over 250 trillion VND, a significant decrease compared to thethird quarter of 2022 due to the proactive repurchase by issuers beforematurity. The acquisition value of the banking and real estate industries in thefourth quarter of 2022 reached 35 trillion VND and 24 trillion VND,respectively.
Experts from VNDirect Securities Joint Stock Company said that in the contextof tightened monetary policy and increasing financial costs, some bond issuershave few opportunities to access capital for financial restructuring andmeeting short-term debt obligations. Liquidity risk is concentrated in a numberof volatile sectors such as real estate.
Can Van Luc, a member of the National Financial Monetary Policy Advisory Council,said that businesses need to step up negotiations with investors to extend thedebt payment maturity.
The Ministry of Finance (MoF) has also recently proposed that the Governmentconsider allowing enterprises to pay principal and interest on bonds in sharesand real estate products.
According to the ministry, if an enterprise cannot pay the bond principal andinterest in cash, they can negotiate with investors to use other assets on theprinciple of complying with the provisions of civil law. This payment methodmust be approved by the bondholders and the enterprise must discloseinformation and take responsibility for the legal status of the assets used topay the principal and interest of the bonds.
To assist enterprises in mobilising capital for production and businessactivities and debt restructuring, the Ministry of Finance shall propose to theGovernment to allow previously issued bonds with an outstanding balance to bechanged in expiration term, the maximum time is two years./.
VNA
