Firms plan to issue convertible bonds

Many companies have proposed raising capital through private placement and issuance of convertible bonds, aiming to attract strategic investors.

Both real estate developer Sacomreal (SCR) and FECON Foundation Engineering & Underground Construction (FCN) plan to issue convertible bonds worth VND500 billion (US$23.7 million) with a term of three years.


SCR will offer bonds with annual interest rates below 12 per cent to its strategic investors. The conversion rate is 1:100, which means one bond can be converted into 100 shares and bondholders can make conversions three times –30 per cent of the bonds in the first year, another 30 per cent in the second year and 40 per cent in the last year.

FCN's bonds have the par value of VND1 million each and pay an interest rate of 6 per cent per year. Bonds can also be converted three times, with the first time 15 months from the date of issuance and the maximum rate 50 per cent of the bonds. The conversion price will not be lower than VND19,500 a share.

VNDirect Securities Co also plans to issue VND500 billion ($23.8 million) worth of convertible bonds to its strategic partners and existing shareholders. The 12-month bonds will pay an interest rate of 5 per cent per year. The capital raised from the issuance will fund the company's future M&A projects.

Meanwhile, shareholders of FIT Investment Co (FIT) approved the company's proposal of issuing convertible bonds worth VND300 billion ($14.28 million) next year. The one-year bonds will pay an interest rate of just 3 per cent per year and be converted at the rate of 1:10.

Nam Bay Bay Investment Corp (NBB) is the only company that will offer convertible bonds in US dollars with a total value of VND210 billion or $10 million. The interest rate will be 5-7.5 per cent per year, but when issuing bonds in Vietnamese dong, the interest rate will be below 10 per cent.