Novaland (NVL) issues ESOP shares at big discount to market price

Novaland (NVL) issues ESOP shares at big discount to market price

The decision to issue shares at such a steep discount comes at a time when Novaland is grappling with significant financial challenges.

Buildings of an apartment project, developed by Novaland, in HCM City. — Photo VNA/VNS Photo

Novaland has announced its plan to issue nearly 97.5 million Employee Stock Ownership Plan (ESOP) shares at a price significantly lower than the current market value, reflecting the company's ongoing efforts to incentivise employees amid challenging financial conditions.

The property developer will distribute approximately 48.8 million shares as bonus shares, which represents 2.5 per cent of the total shares currently in circulation. 

The funding for this issuance will be sourced from retained earnings as per the audited financial report for 2024. 

Notably, the bonus shares come with restrictions on transferability, general employees will face a one-year lock-up period, while key members will have staggered release schedules over three years.

Novaland also plans to sell nearly 48.7 million preferential shares to employees at a price of VNĐ10,000 per share. This price is strikingly lower than the current market price of around VNĐ17,000 per share, constituting a discount of nearly 42 per cent.

The decision to issue shares at such a steep discount comes at a time when Novaland is grappling with significant financial challenges. 

The company's half-year financial report for 2025 revealed a net loss of VNĐ666 billion (US$25.2 million), a marked improvement from the record loss of over VNĐ7.3 trillion in the same period last year, but still indicative of ongoing difficulties. 

As of June 30, Novaland's accumulated losses had reached over VNĐ1.36 trillion.

Moreover, the company has reported a negative cash flow from operations, amounting to negative VNĐ7.46 trillion, which has doubled the figure of the same period in 2024. 

The capital structure raises further concerns, with total debt reaching VNĐ61.83 trillion, including nearly VNĐ30.3 trillion in bonds and VNĐ23.1 trillion in bank loans. The short-term liabilities surpass current assets by VNĐ20.99 trillion, causing immediate repayment pressures.

As Novaland works to stabilise its financial situation, the ESOP issuance is seen as a strategic move to retain talent and sustain employee morale during tough times. 

Analysts suggest that the company's future hinges on the successful execution of asset sales, collection of receivables and maintaining trust with creditors and banks.

The company's leadership, including CEO Dương Văn Bắc, is set to receive substantial allocations from this issuance, which may serve to motivate further commitment from management. 

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