Novaland plans to issue additional shares to convert debts owed to major shareholders into equity. This follows years of shareholder-backed debt repayments, particularly by NovaGroup and Diamond Properties, The Investor has reported.
The article notes that:
- Since early 2022, Novaland has faced severe financial stress, with NVL share prices plummeting. To sustain operations, insiders sold mortgaged shares and used proceeds to pay down Novaland’s loans and bonds—creating on-book obligations owed to those insiders.
- The founding shareholder group’s control has fallen from over 60 percent in 2022 to 38.7 percent by end-2024, and could drop to 37.4 percent after ongoing sales of 19 million NVL shares. The planned debt-to-equity swap would further dilute existing shareholders.
- While the company says the share issuance is needed to reimburse insiders, it admits it will impact minority investors. Management promises transparency and fairness, but has yet to disclose full details of the issuance.
- Novaland aims to complete its restructuring by end-2026 and return to growth from 2027, with a commitment to meet all obligations to shareholders, bondholders, and partners.
- Stock performance: NVL shares rebounded from VND 8,100 (US$0.31) in early April to VND 12,600 (US$0.48) in early May, but have since adjusted to VND 12,050 (US$0.46) amid concerns over Q1 losses, insider selling, and unresolved debts.
Novaland’s restructuring strategy increasingly hinges on equity dilution and insider-forgiven debt, highlighting how Vietnam’s major developers are relying on shareholder lifelines to survive.
Moreover, the Novaland case illustrates that Vietnam’s real estate sector remains in restructuring mode, sustained largely by internal capital and investor patience. External capital is still cautious, and recovery timelines have shifted further out, reinforcing that confidence—both retail and institutional—has yet to return in full.
Moving forward, the industry may stabilise, but only slowly, and not without structural reform.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked