Novaland reduces conversion price of USD 300 million international bonds to VND 40,000/cp; 2.3 times the market price

On February 7th, No Va Investment Corporation (Novaland, stock code: NVL) approved an adjustment to the conversion price of a $300 million bond issue to the bond market. Specifically, the new conversion price will be 40,000 VND/share, 2.3 times the NVL market price on the exchange.

This is the fourth time the company has adjusted the conversion price of the bond lot mentioned above. Most recently, on January 19th, Novaland announced that the conversion price for this bond lot is 77.00 VND/share, with a conversion rate of 59,771 shares/bond.

Initially, the bond had a conversion price of 135,700 VND/share and a conversion rate of 33,916 shares/bond. The conversion price was then adjusted to 85,000 VND/share and the conversion rate was 54,145 shares/bond on January 19, 2022.

In November 2022, Citigroup Global Markets Limited (CGML) – one of the bond holders – exchanged 5 bonds (equivalent to over 23 billion VND at a face value of 200,000 USD/bond) for 270,729 NVL shares at a price of 85,000 VND/share. It is worth noting that at this time, the NVL stock price had just experienced “disaster” with 17 consecutive sessions of decline, and was only around 25,000 VND/share.

It is known that the $300 million international convertible bond issue (~7.368 trillion VND) was issued and listed on the Singapore Exchange (SGX) in July 2021 for international investors. Each bond has a face value of 200,000 USD and a fixed interest rate of 5.25% per year, and was issued in July 2021. International investors were advised by Credit Suisse AG, Singapore branch, and Bank of New York Mellon, London branch as trustees.

In December 2023, Novaland also announced the restructuring of the above-mentioned $300 million foreign bond lot. The company and the bond holders have agreed to support and facilitate the conversion of the bond into common shares. The implementation period is from the date of signing the support letter until May 20, 2024.

According to the agreed terms in the support letter, interest accrued before December 31, 2024 will be paid slowly until the early redemption or bond maturity date. Interest accrued after December 31, 2024 will be paid in cash. The redemption value on the maturity date or early redemption shall be calculated at 115% of the initial investment amount (minus the conversion into shares) plus late payment interest, interest accrued on the late payment interest.

Each investor has 3 conversion periods (6 months, 18 months or 30 months after the effective date of the amendment) with gradually decreasing conversion prices. The number of bonds to be converted is also allocated to each corresponding period: 30%, 40%, 20% and 10% instead of converting the entire amount at once.

According to Novaland, the conversion of the bond will relieve pressure on the company in the context of general difficulties and legal obstacles that have posed many challenges to the Vietnamese real estate market in general, and have affected the company’s business activities and financial situation in particular.