Real Estate Companies Rush to Mobilize Capitals under Tight Credit Conditions

Diep Nguyen

12:22 22/05/2019

BizLIVE -

In some recent years, the government through SBV has restrained credit into real estate. The rate of medium term and long term capitals for real estate will be less than 40%. The risk of lending for real estate will be increased from 150% to 200%.

Real Estate Companies Rush to Mobilize Capitals under Tight Credit Conditions

Photo: Zing

Cenland Board of Management has just approved the share issuing to mobilize more capital to add to charter capital and develop projects.
Accordingly, Cenland decided to issue more than 80 million shares,par value at VND 10,000 to mobilize money for projects and add to company’s working capital. Total value of this share issuance is worth more than VND 800 billion.
It is 90 days after the State Securities Commission (SSC)’s approval that those shares can be sold to investors. The targets are current shareholders according to the list of shareholders finalized at the last registration day.
Expectedly, if the issuing goes on well as planned, Cenland will increase the number of listed shares to more than 160 millions. Currently, the total number of Cenland traded on the stock market is more than 80 millions.
From what was decided at the shareholder meeting at the end of April, the money mobilized through this time of new share issuance will be used to add to the capital and pay for the investment costs, complete the projects of sport infastructures, schools and public utilities; Dong Ky residential project and repay some debts. Total payment for those will be VND 464 billion.
The rest VND 100 billion will be used to pay for the rest of capital funding and complete other sections of investments in the International Vietnamese Overseas Project. The rest VND 250 billion will be added to the working capital.
Noticeably, not just Cenland, by May 21th, most other real estates companies have announced the plans to issue millions of share to add to charter capitals such as Phat Dat, Hai Phat Invest, First Real, Dat Xanh, etc.
From what was finalized at the shareholders’ meeting at the end of March, in 2019, Hai Phat will mobilize more than VND 1,500 billion from selling at least 50 million shares for investors with the par value not less than VND 30,000.
Head of Hanoi office of Yuanta Securities Company, Nguyen Viet Quang, remarked that in some recent years, the government through SBV has restrained credit into real estate. The rate of medium term and long term capitals for real estate will be less than 40%. The risk of lending for real estate will be increased from 150% to 200%.
Thus has led to the reality that real estate companies have had to change the ways to mobilize capitals if they want to get the super projects. Currenly there are more than 60 listed real estate companies, if companies have good projects, mobilizing capital is not challenging at all.

DIEP NGUYEN

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