Vietnamese billionaires now promote capital mobilization through issuing corporate bonds. Photo: Billionaire Nguyen Dang Quang, Chairman of Masan Group.

Billionaire Nguyen Dang Quang’s Masan Group (MSN) has just announced the decision to issue VND4 trillion of non-convertible bonds, no collateral, 3-year term (interest payment for every 6 months) to the public from the fourth quarter.

The capital raised from the bonds will be used to pay off internal loans for its subsidiary, VinCommerce (VND3 trillion), and contribute additional charter capital to The Sherpa (VND1 trillion).

The bond has an interest rate of 10% per year in the first 2 periods. The following periods are determined by the sum of the reference interest rate and the amplitude of 4% per year.

In mid-June, Masan Board of Directors issued a resolution to establish The Sherpa Company Limited and CrownX JSC to complete the merger transaction between Vincomerce (VCM) and Masan Cosumer Holdings (MCH).

At the same time, Masan Board of Directors also approved the plan of issuing private bonds with a maximum value of VND4 trillion, starting from the third quarter.

Thus, the total new bonds that Masan Group plans to issue is worth VND8 trillion. Previously, Masan completed the mobilization of capital worth VND10 trillion in June.

Meanwhile, Novaland (NVL) has announced its plan to contribute more than VND1.6 trillion to increase the charter capital of the An Phat Estate Investment Development Co.Ltd in the third quarter. Novaland will continue to hold 99.999% capital of An Phat.

Novaland plans to offer separate non-convertible bonds, without warrants, with collateral (shares of Nova Phu Sa), 24-month term with a total value of VND1,290 billion in order to partially finance An Phat’s capital increase.

In mid-July, Vingroup Board of Directors passed a decision to organize a written consultation of shareholders (from August 8 to September 8) to approve the offering and listing of its bonds to the international market.

In the first half of 2020, three subsidiaries of Vingroup - VinHomes, Green City Development Joint Stock Company and Vincom Retail - raised a total of over VND15 trillion via bonds. By the end of 2019, VinFast also completed the mobilization of VND10 trillion of bonds.

Large domestic private groups recently boosted capital mobilization from corporate bonds to serve the expansion of production activities. Corporate bonds have high interest rates but are easy to access.

V. Ha

Will demand for corporate bonds become weaker because of a new law?

Under the amended Enterprise Law ratified by the National Assembly on June 17, nonprofessional investors are prohibited from trading corporate bonds issued in private offerings from January 1, 2021.