Realty firms look to raise capital via bonds

Tuesday, Sep 26, 2023 10:04

A condotel project developed by Nam Long Investment Joint Stock Company (NLG). NLG has approved a plan to issue corporate bonds with a maximum total value of VNĐ500 billion, expected to be implemented in the third quarter of this year. — Photo courtesy of NLG

Real estate companies are continuously announcing plans to issue bonds to raise capital.

The Board of Directors of Nam Long Investment Joint Stock Company (NLG) on September 19 approved a plan to issue corporate bonds with a maximum total value of VNĐ500 billion (US$21.2 million), expected to be implemented in the third quarter of this year.

The bond lot is a non-convertible bond, with a term of five years, without warrants, with an expected interest rate of 9.6 per cent per year.

With the proceeds, Nam Long will use them to invest in the Nam Long 2 Residential Area project in Nam Cần Thơ Urban Area, Cần Thơ City. The project has a total investment capital of VNĐ500 billion; total area of 43.8 hectares. In mid-February this year, Cần Thơ City People's Committee allocated land to Nam Long to implement the project.

Also on September 19, Văn Phú - Invest Investment Joint Stock Company (VPI) approved a plan to issue bonds to the public with a maximum total value of VNĐ650 billion. They are non-convertible bonds, without warrants.

The company did not disclose the purpose of this capital mobilisation.

On September 14, the Board of Directors of Industrial Investment and Development Corporation - Joint Stock Company (BCM) also approved a plan to issue bonds with a total par value of VNĐ760 billion.

Hồ Chí Minh City Infrastructure Investment Joint Stock Company (CII) recently revealed its plan to mobilise bonds of nearly VNĐ7 trillion at the company's 2023 Extraordinary General Meeting of Shareholders.

CII said it is working with an international financial institution to guarantee payment for bonds that the company plans to issue with a total value of nearly VNĐ2.4 trillion, with a term of over 10 years.

The company also plans to issue convertible bonds to existing shareholders with a term of 10 years, total value VNĐ4.5 trillion.

Statistics of the Hà Nội Stock Exchange (HNX), from the end of July until now, show that real estate businesses have mobilised a total of VNĐ24.82 trillion from the bond channel. In September alone, there was a lot worth VNĐ1 trillion issued by the Vietnam - Singapore Industrial Park Joint Venture Company Limited (VSIP).

Businesses issuing large bond volumes included Capitaland Tower Co Ltd (with four lots of bonds with a total value of nearly VNĐ12.24 trillion), Lan Việt Real Estate Co Ltd (VNĐ4.1 trillion), BIM Real Estate Joint Stock Company (BIM Land) (VNĐ2.3 trillion), and Phú Thọ Land Joint Stock Company (VNĐ1.9 trillion).

In addition to the bond channel, in September, real estate businesses also announced plans to mobilise capital through other channels.

For example, Ngân Hiệp Real Estate Joint Stock Company plans to borrow from MBBank with a maximum credit limit of VNĐ1.2 trillion.

This enterprise is a subsidiary of No Va Real Estate Group Joint Stock Company (Novaland or NVL), borrowing capital for the purpose of investing, constructing and developing two projects of Ngân Hiệp 1 and 2 tourism areas, part of the Novaworld – Hồ Tràm project in Bà Rịa-Vũng Tàu Province.

Another enterprise, Sài Gòn-Hải Phòng Industrial Park Joint Stock Company (SHP) also plans to borrow VNĐ1.12 trillion, to invest in the social housing project under the Tràng Duệ Commercial Services and Workers' Housing project.

SHP is a subsidiary of Kinh Bắc Urban Development Corporation - JSC (KBC).

Kiên Giang Construction Investment Consulting Group Joint Stock Company (CKG) has just approved a plan to offer more than 13.4 million individual shares to professional stock investors.

Accordingly, the company expects the issuance price to be VNĐ15,000 per share, 44 per cent lower than the market price of CKG at the closing time on September 14. If completed as planned, CKG will collect more than VNĐ201 billion from this deal to pay off due debts, debts payable to construction units, and payment for raw materials. — VNS

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