Novaland proposes to restructure bond debt, extend term by 4 years, what does the Ministry of Finance say?

The Ministry of Finance believes that Novaland's proposal must be considered and evaluated comprehensively, harmonizing the interests between the issuing enterprise and bond-holding investors according to the principle of harmonized benefits and shared risks.

A corner of Aqua City urban area invested by Novaland in Dong Nai - Photo: NGOC HIEN

In a document sent to the Ministry of Construction , the standing agency of the Prime Minister's Working Group on reviewing, urging, and guiding the removal of difficulties and obstacles in the implementation of real estate projects for localities and enterprises, the Ministry of Finance requested the Ministry of Construction to work with the State Bank to resolve two petitions by Novaland related to commercial banks that have issued bonds for this group.

These are the recommendations: Allow commercial banks to support the extension of bond terms and loans invested by banks without having to set aside provisions and transfer debt groups.

And allow commercial banks to support Novaland in restructuring bond debts and flexibly support options.

Regarding Novaland's proposal to consider adjusting Decree 08/2023 (Decree 08) of the Government in the direction of allowing enterprises to extend and prolong the term of corporate bonds for a period of no more than 4 years, the Ministry of Finance said that during the process of developing and promulgating Decree 08, the Government decided to allow the extension of the term of bonds based on a careful assessment of the impact, balancing the maturity of the entire outstanding bond portfolio and ensuring the rights of investors, increasing transparency in the market.

The Ministry of Finance is synthesizing opinions of corporate bond market participants and opinions of ministries and branches to study and amend legal regulations on corporate bond issuance.

Accordingly, Novaland's proposal needs to be considered and evaluated comprehensively, ensuring the harmony of interests between the issuing enterprise and bond-holding investors on the principle of harmonious interests and shared difficulties.

According to Novaland's financial report, as of the end of June 2024, the group's short-term bond debt (due in the next 12 months) was nearly VND 16,439 billion, and long-term bond debt was about VND 22,221 billion.

Recently, Novaland has faced many bonds maturing but has not been able to pay investors. This group has repeatedly announced late interest payments on the bonds and requested an extension of principal and interest payments because it has not been able to arrange a source of payment.

Source: https://tuoitre.vn/novaland-kien-nghi-tai-cau-truc-no-trai-phieu-keo-dai-thoi-han-them-4-nam-bo-tai-chinh-noi-gi-20241027142541739.htm