Vietnam property developer No Va Land to hold board meeting amid creditor pressure
VIETNAM’S No Va Land will hold an extraordinary board meeting on Thursday (Oct 26) to discuss growing pressure from holders of a US$300 million convertible bond after it missed an interest payment in July, two people with knowledge of the matter said.
The property developer was urged in September to negotiate a debt restructuring agreement by a group of international creditors with combined 75 per cent ownership of the 2026 unsecured convertible bond.
A smaller group of bondholders is now discussing the possible issue of a so-called acceleration notice, separate sources said.
Acceleration clauses are customary in debt agreements, which provide for creditors’ claims to be rendered due and payable once a triggering event has occurred.
The group collectively owns more than 25 per cent of the bond and includes US and Hong Kong-based hedge funds, according to a bondholder who declined to be identified discussing information not publicly disclosed.
No Va Land did not comment on whether a board meeting had been called but said in a statement to Reuters that it was striving to accommodate bondholders “within the company’s resources... given the current difficult market context and our limited liquidity”.
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The Ho Chi Minh City-listed company has seen its shares plunge by more than 80 per cent over the past year. The country’s real estate sector has been struggling for months amid a government crackdown on corruption as well as due to stricter rules on corporate bond issuance that led to a credit crunch.
The market value of the convertible bond is now at around US$90 million, less than one-third of its original value.
No Va Land has been conducting negotiations with multiple creditors and has struck deals with some.
US fund Warburg Pincus, which led a consortium that invested US$250 million in the company, agreed to convert US$200 million of that into shares of No Va Land subsidiaries, a source has previously said.
Last November, Citigroup converted five convertible bonds worth US$1 million into around 271,000 shares of No Va Land with a 85,000 dong conversion price, six times higher than No Va Land’s current share price. REUTERS
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