LONDON & HO CHI MINH CITY, Vietnam--(BUSINESS WIRE)--Sep 25, 2023--
To avoid issuance of an acceleration notice, No Va Land Investment Group Corp. must engage with an Ad Hoc Group of international bondholders, comprising investors with a combined AUM in excess of USD15bn, holding over 75% of USD 300m convertible bonds, to negotiate a restructuring agreement in good faith. An acceleration notice would have a spiralling e!ect on other stakeholders; if unsecured creditors accelerate the debt to step to the front of the line, more senior (secured) creditors will likely accelerate, derailing the entire restructuring process underway with onshore creditors, risking bankruptcy. Furthermore, equity could be zeroed out, ceding control of the company to creditors.
The Trustee to No Va Land’s USD 300m convertible bonds, Bank of NY Mellon, has already issued multiple Event of Default notices, most recently on 17 July 2023, related to the missed coupon payment due 16 July 2023. Despite a process to negotiate a consensual restructuring in the wake of a forbearance agreement having been attempted, the Board of No Va Land has refused to engage with the group in good faith.
The case has implications for other Vietnamese conglomerates with debt trading at stressed levels and refinancing concerns. This is the first restructuring in the context of the Vietnam 2035 vision and government attempts to capitalise on the growing China + 1 strategy. The stalling of No Va Land’s restructuring almost certainly creates issues for other companies which are critical to the Vietnamese economy. This would seem entirely unsatisfactory for the government’s plans to achieve its ambitious GDP growth in 2H 2023, which will be reliant on foreign investment after GDP growth significantly slowed, to 3.7% in 1H 2023, from 8% in 2022.
The Ad Hoc Group, whose members have been significant investors in Vietnam over many years, are highly concerned about the prioritisation of onshore creditors over international investors. A failure to reach an agreement is significantly impacting Vietnam’s standing in the international financial market and damaging investor confidence in the country.
A bondholder said: “As long term and significant investors in Vietnam, we urge the Board of No Va Land to engage with us to reach a consensual agreement, rather than refusing to countenance serious negotiations. This is for the good of the company, its stakeholders and Vietnam’s standing among international investors. No Va Land’s proposal further erodes our confidence in the process, forcing us to consider an acceleration notice which would negatively impact creditors and likely wipe out equity. By negotiating with onshore investors while blatantly sidelining international investors, No Va Land is projecting the message that global investors will not be supported but overlooked in a default, which is not conducive to encouraging the FDI Vietnam needs to capitalise on the growing China + 1 investment strategy.”
European business confidence in Vietnam dropped 4.5 points in Q2 2023, its lowest level in over a decade (excluding the Covid pandemic) and worse than during the Vietnam banking crisis of 2012, according to a report by the European Chamber of Commerce in Vietnam. The number of businesses who plan no increase in FDI in Vietnam rose c.4% QoQ to 40%. The top two obstacles cited to doing business are unclear rules and regulations and administrative issues and di"culties.
Continued Foreign Direct Investments into Vietnam are required to support the rapid capital expenditure to scale domestic infrastructure spending and this all needs to be underpinned by a functioning restructuring regime.
Ngày 17-8, Tập đoàn Evergrande của Trung Quốc đã nộp đơn xin bảo hộ phá sản ở New York, Mỹ.
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