Real estate enterprise well-prepared to face challenges

Real estate enterprise well-prepared to face challenges

Novaland Group (HOSE: NVL), a leading real estate investor & developer in Vietnam, has well prepared to overcome this difficult situation of the market. It has received the attention of both international investors and domestic experts.

While facing the Covid-19 pandemic, the Group has been simultaneously implementing its Business Contigency plan with numerous solutions to ensure continuous business operations with a focus on analyzing and creating financial scenarios, including: strengthen cash and cash-equivalents management, forecast and optimize cash flow in different market scenarios; optimize operating expenditures; and enhance relationships and provide timely information to local and foreign investors and financial institutions. In addition, Novaland has ensured uninterrupted operation of the Company and customer transactions.

Notably, long-term financial mobilization still sticks to plan, helps the implementation of the Novaland’s business strategy of phase 2 on track.

Typically, end of March 2020, Novaland received a second disbursement of USD 101 million from the international syndicated loan worth USD 250 million led by Credit Suisse AG (Singapore) as the Originated Mandated Arranger and Bookrunner (“OMLAB”). The first disbursement of USD 149 million took place in the fourth quarter of 2019. Credit Suisse AG (Singapore) is the Originated Mandated Arranger and Bookrunner (“OMLAB”). The transaction of USD 250 million drew major attention and was oversubscribed by 14 major international commercial banks.

Through this transaction, Novaland has opened a new channel of capital mobilization with a larger scale from international commercial banks, who are able to offer bigger loans than non-bank institutions, with longer terms and lower interest rates.

The Sun Avenue – residential project of Novaland in Dist 2, Hochiminh City

According to Mr. Troy Griffiths, Deputy Managing Director of Savills Viet Nam, “In this comprehensive context, the second disbursement of USD 101 million from international commercial banks with competitive interest rate to Novaland has created impressive attention on the capital market. This drawdown affirms the investors’ strong conviction in the development and project execution capability of Novaland”.

Even more encouragingly, the group of foreign banks participating this time includes a number of banks which have either never invested or invested a modest amount in Vietnam or Novaland..

One of Novaland’s key challenges when entering into this transaction is having to prove our feasibility to international partners when it comes to developing, commercializing and operating these large-scale projects. Through this transaction, the involved international commercial banks also showed trust in Novaland’s strategy, with a focus on three key product lines, including residential projects in Ho Chi Minh City, satellite townships, and hospitality real estate projects based on a total landbank of nearly 5,000 ha, which is sufficient for the Group to develop in the next 10-15 years.

PV