The promoter/ investor has obtained all necessary licenses and permits to develop the project.
The project broke ground in 2009 and significant foundation and piling works are 40% completed.
The project has pre-sold 50 units out of the total development of 334 units.
The development company will obtain a new market valuation of the project land in next 1-2 months.
NEW INVESTOR PROPOSAL
Provide development financing commitment of US$15.0 million to be disbursed progressively over the project development cycle.
The project inflow can be structured as pure debt option or convertible debt option to be discussed and agreed later.
The development company shares and land can be pledged as security for all development financing.
The new investor has further option to build Phase 2 in adjacent plot of land on JV basis.
INDICATIVE FINANCING TERM SHEET
Limit of Facility : US$15.0 Million
Tenure of Facility : 24-30 months
Interest : 8-9% per annum
Fees: 1-2% per annum of funded facility
Convertible option (exercise period 6-12 months)
Security: Shares and Land
Purpose: Development Financing
RATIONALE FOR EXTERNAL FINANCING
Local Banks have been forced by State Bank of Vietnam regulations to reduce loans to property development projects without 30%+ equity in the project development costs. This punitive requirement affects many developers in Vietnam who are forced to find overseas partners or funders to complete the project.
FINANCE DOCUMENTS FOR EXECUTION
Debt Agreement – registered with State BANK OF Vietnam for repayment of loans and interest in future periods.
Convertible Debt Agreement – option to exercise debt to equity conversion of loans
Business Co-Operation Agreement – legal framework to establish clear nexus of investors and project owners in the development of project.
Asset Pledge Agreement – create legal charge over shares and land of Company
Both parties can appoint independent legal counsel to execute these Agreements in Vietnam.
DUE DILIGENCE DOCUMENTS AVAILABLE
Project licenses, development permits and approvals
Project design and approved engineering drawings
Land title deeds
Company and share ownership forms
All documents available for inspection during site visit and after signing LOI’s and Confidentiality Agreements.