Vietnam’s embattled real estate developer Novaland has advised investors via a disclosure to the Singapore Stock Exchange (SGX) that a bond interest repayment due January 16 will not proceed as scheduled. The firm has said it has insufficient resources to make the repayment because “… the progress in resolving the legal obstacles for real estate projects has not proceeded as planned, substantially affecting cash collection of the company…”
The bonds in question were restructured in mid-2024 in what was seen as a precedent setting move by the Singapore International Commercial Court. This was designed to give the firm some breathing room to get back on its feet, however, it is looking increasingly like not much has changed over the last half year or so. In fact, the company’s position seems to have deteriorated.
Of note, in late 2024 the company changed its auditor from Price Waterhouse Cooper to a local firm. It claimed the former had caused delays in its disclosures to the Ho Chi Minh City Stock Exchange, however, this came just weeks after a dispute between the auditor and Novaland had been made public. Specifically, PWC had revised what Novaland’s internal tax agents had found to be a profit of VND 3.5 trillion or US$142.2 million to a loss of VND 7.3 trillion or US$296.6 million.
This all stems from a broader breakdown in the local real estate market which has only barely scratched the surface of a recovery.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked