Business

Novaland mobilizes additional $160 million to expand its land fund

By Ha Linh May 03, 2018 | 08:26 AM GMT+7

Novaland has successfully raised $160 million from the issuance of its global convertible bonds which are officially listed on the Singapore Exchange.

Victoria Village Project located in District 2, Ho Chi Minh City was introduced to the market by Novaland in April.

This is the first time in six years, a Vietnamese company successfully issued convertible bonds on the international stock exchange.

In this issuance of convertible bonds, Novaland attracted huge attention from Asian and European investors. Bonds issued in U.S. dollars, due in 2023, may be converted into ordinary shares at an initial conversion price of VND74,750 ($3.29) per share, 15 per cent higher than the price reference of share at the day of issuance.

Convertible bonds are issued at face value with interest rate of 5.5 per cent per annum, paid semi-annually and yield to maturity of 6.25 per cent pa. Credit Suisse (Singapore) Limited acts as the principal adviser and arranger for the fundraising campaign.

Previously, Novaland also successfully raised $150 million from the top-up share placement, bringing the total raised capital to $310 million. This is also the largest capital mobilization of a Vietnamese enterprise from the simultaneous issuance of shares and convertible bonds.

According to Global Capital, Novaland’s transaction is a special case. This is a transaction of convertible bond listed on the first international stock exchange issued from Vietnam in six years, breaking the long-awaited slump since the similar transaction of $115 million Vingroup in 2012.

Novaland intends to use the capital raised from this issuance to increase its land fund in prime locations and develop real estate projects, as well as to raise working capital and serve the general operations of the Group. With this capital source, the Group plans to introduce three new projects this year.

Last week, the General Meeting of Shareholders of Novaland approved the business plan in 2018, with sales expected to reach VND21.78 trillion ($958 million) and after-tax profit of VND3.2 trillion ($140 million), up 87 per cent and 55 per cent respectively over the same period last year.

Novaland expects to hand over 11 projects with around 6,500 products this year. Such projects are located in prime locations in Ho Chi Minh City with the average rate of customer’s selection of over 90 per cent.

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