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|A Novaland project in District 2, Ho Chi Minh City named Victoria Village|
According to Novaland, the bonds will mature in 2023 and can be converted to ordinary shares at the price of VND74,750 ($) per share, or 15 per cent higher than the market price at the issued date. The annual yield stands at 5.5 per cent, payments are made every six months, and the yield to maturity is 6.25 per cent.
Credit Suisse (Singapore) acts as the main advisor and underwriter for this transaction, which was completed last week. The bonds were later listed on the Singapore Stock Exchange (SGX).
“The deal has attracted various investors from Europe and Asia,” said Novaland in a statement.
The last time a Vietnamese business issued international convertible bonds was six years ago, when Vingroup JSC raised $300 million via two issuances on the SGX.
Prior to the bond offer, Novaland had injected another $150 million from top-up share sales, which means current shareholders at the real estate firm lent their stakes to others, but would later buy back the shares at the same price that they had been sold. This means these investors are buying new shares and new capital will flow into the business.
Novaland plans to use the new capital from the bond offer and share sales, altogether standing at $310 million, to expand its land bank and develop new projects. At least three new projects are slated to come to the market in 2018, said the firm.
In 2018, Novaland sets out to reach VND21.7 trillion ($953 million) of revenue, or a whopping 87 per cent rise against 2017. After-tax profit is expected to grow by 55 per cent to reach VND3.2 trillion ($140 million). The real estate group plans to hand over 11 projects, or 6,500 products, to customers this year.
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