The Board of Directors of No Va Land Investment Group Corporation (Novaland - NVL) recently approved a plan to issue shares for debt conversion. The total issuance amounts to nearly 164 million units, representing 7,99% of the total outstanding shares.
The issuance price, which also reflects the debt conversion rate, is 15,747 dong per unit. Through this transaction, Novaland will eliminate debts totaling over 2,577 billion dong.
These shares will be directly distributed to creditors and will be restricted from transfer for one year. The issuance is expected to occur from Q4/2025 to Q1/2026.
The two creditors are Novagroup and Diamond Properties. Novagroup is an organization where Bui Thanh Nhon, Chairman of Novaland's Board of Directors, is the largest shareholder. Diamond Properties is a company chaired by Cao Thi Ngoc Suong, Mr. Nhon's wife. Both entities had previously mortgaged their shares for Novaland's loans. During a challenging period for the company, these shareholders sold pledged shares to repay debt on Novaland's behalf.
This share issuance plan for debt repayment marks a change from the initial proposal put forward in August. Previously, NVL intended to issue over 168 million shares to convert debts exceeding 2,645 billion dong. In addition to the two companies linked to Mr. Nhon, Hoang Thu Chau was also listed as a creditor.
Following the transaction, the ownership percentages of major shareholders will change. Novagroup's stake will increase to 22,24%, while Diamond Properties' will decrease to 7,75% due to receiving fewer additional shares, which did not keep pace with the dilution.
However, the overall ownership percentage in NVL held by the shareholder group associated with Bui Thanh Nhon's family will improve. Currently, they hold approximately 36,7% of the capital, close to the threshold where they might lose veto power at NVL. After the aforementioned transaction, this percentage is projected to rise to 40,44%.
For the first nine months, NVL recorded consolidated net revenue of 5,398 billion dong. Of this, net sales revenue reached nearly 4,956 billion dong, a 33% increase compared to the same period last year, primarily from handovers at projects such as NovaWorld Phan Thiet, NovaWorld Ho Tram, Aqua City, Sunrise Riverside, and Palm City. The company reported a loss of 1,820 billion dong, mainly due to a decrease in financial activities revenue.
Novaland's total outstanding debt is over 64,000 billion dong, with approximately 32,000 billion dong in short-term debt. Facing ongoing cash flow challenges, the company is actively seeking solutions, continuing to negotiate restructuring options, and implementing various measures to meet maturing obligations and address outstanding deficiencies to ensure investor interests.
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