HCMC – Major property developer Novaland has asked the central bank to enable debt restructuring and extension from 24 to 36 months for property firms.
The proposal was made by Do Thi Phuong Nam, director for corporate restructuring at Novaland, during a meeting between the State Bank, lender banks and real estate companies held yesterday, February 8.
As bank loans and corporate bond sales are two vital funding sources for the housing market, property firms would grapple with difficulties if these fund-raising channels are shut.
Nearly 40% of real estate companies were driven into insolvency last year, showed data from the Ministry of Construction.
Novaland’s net revenue and profit after tax in 2022 plunged 25% and 34% year-on-year to over VND11.1 trillion and nearly VND2.3 trillion, respectively.
The price of its stock NVL plunged from VND86,400 in June 2022 to VND14,400 in the trading session that closed on February 7.
Nam attributed the hardship plaguing the sector to legal procedures, as thousands of property projects in the southern provinces could not progress due to time-consuming paperwork. This was also the reason behind soaring housing prices, she added.
On February 7, the HCMC Real Estate Association wrote to the central bank proposing allowing credit restructuring to help real estate firms ease the financial crunch.
Many real estate firms might exit the market if access to credit remains difficult and the sales volume stays low, the association said in its letter.