Sunday , June 23 2024

Main stakeholders not abandoning Novaland: senior executive

The divestment of stakes by NovaGroup and other shareholders in Novaland is not to shirk responsibility but to fulfill debt obligations, a senior executive at the latter has said.

The registered stake sale by NovaGroup, the biggest shareholder in the property company, is to help restructure debts and redeem bonds, Do Thi Phuong Lan, a member of Novaland’s management consulting board, said at the annual general meeting on Thursday.

Investment firm NovaGroup has registered to sell a nearly 7% stake in its affiliate by next month, which will take its holdings in Novaland down from 27.67% to 20.68%.

Novaland chairman Bui Thanh Nhon, his family, NovaGroup, and Diamond Properties (another company owned by Nhon) currently own over 50.5% of Novaland, but that is set to fall to 43.6% after the sale.

Last month Diamond Properties and NovaGroup had sold 4.5 million and 14.4 million NVL shares.

Lan said in response to shareholders’ questions on the reason behind the stake sale: “NovaGroup and the family of Novaland chairman Bui Thanh Nhon have returned to directly managing Novaland. They are ready to face any challenges and do not plan to run away from the company.”

After months of difficulties, Novaland’s situation has improved and its debts are declining. As of the end of March it had debts of VND62.7 trillion, down 12.6% from six months earlier.

The company expects to get revenues of VND251 trillion from sale of projects that are waiting for completion of legal requirements.

Nhon is confident the company would recover by the third quarter.

He also apologized for the difficulties that many of the company’s partners, customers and laid-off employees had faced in recent months due to its financial challenges.

“We will follow through with all of our commitments to customers, investors and partners. Please give us time.”

In the next two years Novaland plans to develop two new projects in Ho Chi Minh City and another in a neighboring province.

It expects revenues to fall nearly 15% year-on-year to VND9.53 trillion and post-tax profits to an eight-year low of VND214 billion.

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