Cash flow pressure and bond debt are forcing many businesses to find solutions to convert bonds into stocks - Photo: QUANG DINH
To solve the debt burden, businesses are making the most of converting bonds into shares, including many "big guys" who have approved plans to issue convertible shares in the near future.
Businesses "convert debt into capital"
Debt-to-equity swap is a fairly common financial activity in the world , and has become a popular trend in Vietnam in recent years, especially for businesses facing difficulties.
In which, the "big guys" in the real estate industry have been and are carrying out bond-to-stock swap deals to improve their balance sheets.
The extraordinary general meeting of shareholders recently held by Novaland (stock code: NVL) approved the issuance of more than 168 million individual shares to swap a debt of more than VND 2,645 billion for 3 creditors including NovaGroup (VND 2,527 billion), Diamond Properties (VND 112 billion) and Ms. Hoang Thu Chau (VND 6.6 billion).
According to Novaland, these three creditors have pledged their shares for secured loans so that the company can fulfill its payment obligations during the difficult period to maintain continuous operations. These creditors have reached an agreement in principle to swap debts with Novaland.
In addition, Novaland shareholders also approved the plan to issue more than 151 million shares at an issue price of VND40,000/share, to exchange for the entire outstanding principal of 13 bond codes. These are bond codes issued from 2021 and 2022, with the main maturity period in 2023 - 2025, with a total outstanding principal value of VND6,074 billion.
Also exchanging debt for shares, Hoang Anh Gia Lai Joint Stock Company (stock code: HAG) consulted shareholders on exchanging debt by issuing 210 million shares at VND12,000/share. Accordingly, each VND12,000 debt will be converted into 1 newly issued share.
Hoang Anh Gia Lai said this is the next step in the roadmap to handle the bond debt with a total value of nearly VND6,600 billion, issued since 2016. After the restructuring in 2024, this debt will be divided into two groups with principal balance of VND2,150 billion (group A) and VND2,000 billion (group B), respectively.
After the issuance, Hoang Anh Gia Lai bondholders will become shareholders of this multi-industry company.
Similarly, Hoang Quan Real Estate Trading and Service Consulting Joint Stock Company (stock code: HQC) also proposed a debt swap plan by issuing additional shares to offset debts.
According to the plan, Hoang Quan will issue 50 million shares at VND10,000/share to exchange for VND500 billion in debt. Of which, Hoang Quan's VND212 billion debt to Hai Phat Investment Joint Stock Company will be converted into 21.2 million shares, equivalent to 3.38% of ownership after issuance.
Previously, some businesses in the construction industry also successfully converted debt from short-term debt to company shares.
Short-term dilution of stock value
According to Novaland representative, the outstanding principal of individual bonds has mostly been outstanding since 2023 until now, however, due to difficult business situation and pressure over the past years, Novaland has not been able to fulfill its commitment to bondholders.
Therefore, along with restructuring solutions and the plan to issue shares to exchange outstanding bonds this time, bondholders will have more diverse and suitable choices to suit their needs.
After implementing the plan to issue additional shares to convert bond debt, Novaland's charter capital will increase to more than VND 21,019 billion, the ratio of the number of shares issued to the total number of outstanding shares is 7.8%.
"In the short term, issuing additional shares will dilute current shareholders, but this is a necessary step to help Novaland restructure, reduce cash flow pressure, improve financial safety ratio, and at the same time demonstrate goodwill and always strive to ensure the power of all parties," Novaland explained.
Speaking to Tuoi Tre Online , the leader of a real estate company in Ho Chi Minh City said that businesses competing to convert debt and bonds into stocks is considered an "escape route" for businesses that are struggling due to debt repayment pressure.
Instead of having to pay hundreds or even thousands of billions of VND each year or mature large bonds, businesses will have less burden when converting debt into equity. This not only helps improve cash flow but also "beautifies" the balance sheet.
However, for investors, he also warned of the risks that may be encountered if the unfavorable economic context affects the stock price. Moreover, issuing additional shares for conversion can dilute the value of current shares, causing damage to other shareholders.
"From a safe investment with fixed income, investors become shareholders, sharing the risk of stock price fluctuations. If the business continues to face difficulties, the stock price may fall, affecting their investment," he said.
According to data from the Vietnam Bond Market Association (VBMA), the total value of bonds maturing in the second half of 2025 is estimated at VND 131,601 billion, of which real estate bonds alone account for VND 69,970 billion, equivalent to 53% of the total maturity volume.
Notably, in August 2025 alone, the value of maturing real estate bonds reached VND17,500 billion, nearly double that of July and the highest level since the beginning of the year.
Source: https://tuoitre.vn/doanh-nghiep-thi-nhau-hoan-doi-no-chuyen-trai-phieu-sang-co-phieu-20250812123739512.htm
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