Risks increase, creditors demand Novaland mortgage additional assets.

Novaland has mortgaged numerous documents related to the Aqua City urban area project (Dong Nai) to bondholders - Photo: A. LOC

Nova Real Estate Group Joint Stock Company (Novaland) has just provided information to the Hanoi Stock Exchange regarding the NVLH2123010 bond issue, valued at over 860 billion VND, which the company issued three years ago.

The bondholders rejected Novaland's offer, forcing them to provide additional collateral.

According to Novaland's updated report, due to the sharp drop in share prices, which affected the value of the collateral securing the bonds, bondholders (owners of the bond issue, creditors) did not agree to waive the collateral requirement, as previously proposed by the company.

The bondholders requested that the business complete the mortgage contract procedures and register the secured transaction as soon as the conditions are met.

The appendix shows that the additional collateral includes 47 certificates of land use rights, ownership of houses and assets attached to the land at the high-end commercial and service urban area project of Phuoc Hung Island (Phoenix Island, part of the Aqua City project, Dong Nai province).

It is known that the aforementioned bond issue was issued by Novaland in September 2021, raising over 860 billion VND. Thanks to an extension of the payment period by 21 months, this bond issue will only mature in March 2025. The interest rate during the extension period is fixed at 11.5% per year, an increase of 1% compared to before.

Stock price hits historical low.

On the stock market, NVL shares closed the trading session on October 16th at 10,200 VND per share, hitting an all-time low. Over the past year, the stock has experienced a decline of approximately 30%.

In a related development, NVL shares recently experienced a massive sell-off by investors following news that Ms. Truong My Lan demanded 2,500 billion VND in cash to mitigate the consequences of a case related to the Viet Phat Industrial and Urban Area project (Suntec City). In response, Novaland stated that the demand was completely unfounded.

During its heyday, NVL was a shining star, reaching a peak of 121,000 VND/share (June 29, 2021). It then remained at a high level of around 80,000 VND until the end of 2022.

Amidst the overall difficulties in the real estate market, especially with the severe decline in investor confidence in the bond market and the increasing difficulty in raising capital, Novaland and many other real estate companies are also facing challenges.

Novaland suffers record losses, auditing firm remains cautious.

Regarding the business picture, the audited consolidated financial report for the first half of 2024 shows that the company incurred a net loss of over 7,300 billion VND, a record loss in the company's history, and a significant difference from the 345 billion VND profit reported in the previously prepared unaudited report.

Novaland explained that the significant discrepancy between pre- and post-audit figures mainly stemmed from the fact that the auditing firm PwC required the provision for land lease and usage fees payable based on the 2017 land price scheme for the Lakeview City project (Thu Duc City, Ho Chi Minh City).

The company believes that the authorities made a mistake in calculating the land price for this project, and has therefore petitioned the Ho Chi Minh City People's Committee for review and resolution.

Therefore, the provision for doubtful debts can be revised and reversed when eligible in the future.

Speaking to Tuoi Tre Online , a senior manager working at one of the top four auditing firms (Big4) commented that the requirement for Novaland to make such provisions shows the auditing firm's caution.

Recently, the market has seen not only Novaland but also several other businesses shift from profit to loss, with significant discrepancies between pre- and post-audit financial statements.

The businesses then provided explanations regarding the incident. Investors can monitor and analyze the information carefully, and then make appropriate decisions.

Source: https://tuoitre.vn/rui-ro-tang-chu-no-doi-novaland-the-chap-them-tai-san-20241016224100544.htm