Novaland has proposed a plan to increase charter capital through stock issuance to shareholders, according to the company’s document. 

The real estate developer specifically requests that shareholders approve the Board of Directors decisions regarding the company's restructuring, including the negotiation and implementation of new share and convertible bond issuances as well as other actions to boost operating capital and financial restructuring.

Novaland intends to release more than 975 million individual shares as part of the proposal to issue new shares at a price of at least VNĐ10,000 (US$0.42) per share. The company will make at least VNĐ9.75 trillion if it is effective. Professional securities and strategic investors are buyers of stocks.

The funds will be used to restructure, settle past-due debts, carry out projects, pay taxes and fulfill other obligations to the State budget, and raise the working capital of its subsidiary.

It also intends to issue 1.95 billion additional shares to current shareholders at a ratio of 1:1, which means that holders of each share will be entitled to purchase one additional share. The share's sale price cannot be less than VNĐ10,000.

Novaland can therefore earn at least VNĐ19.5 trillion if it effectively sells all of the shares. It plans to use the funds to restructure its debt, pay off past-due debts, pay staff salaries, cover general operating expenses, and carry out initiatives that the company has invested in.

The two plans are expected to run in 2023, or according to the decision of the Board of Directors, after the State Securities Commission (SSC) issues the certificate of registration to offer more shares to the public.

If both issuance options are authorised and fully implemented, Novaland's charter capital will increase by nearly 2.5 times, from roughly VNĐ19.5 trillion to VNĐ48.7 trillion, making it one of the top companies with the largest charter capital on the Vietnamese stock exchanges.

Additionally, it plans to issue shares under the Employee Stock Option Programme (ESOP) in 2023. The volume is up to 1.5 per cent of the company's outstanding shares at the moment of issuance, and the price is at least VNĐ10,000.

Members of the Board of Directors and employees on the approved list by the Board of Directors are among the subjects of the offering. The goal is to raise the benefits for Board of Directors and employees while luring talent.

Regarding the handling of domestic bond debt, there are now hundreds of bondholders who have agreed to swap bonds for real estate products during this period after the proposal of the company, Bùi Thành Nhơn said in his letter published on February 24. Besides, Novaland is also making efforts to negotiate and agree with the lenders on debts. — VNS