Property firm slashes apartment prices to ease loan pressure

November 01, 2011 | 07:40

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The PetroVietnam Power Land JS Company has just announced a price discount of 35 per cent on apartments to ease the financial pressure it is under to repay bank loans.

PetroVietnam Landmark project

The company, listed on the Hanoi Stock Exchange under the PVL share code, will lower the prices of 85 apartments in its Petro Vietnam Landmark project to VND15.5 million ($741.62) per square metre from a previous level of VND21.6 million ($1,033).

The sell-off is aimed to resolve the difficulties the company finds itself in with a frozen property market and rising input costs. PetroVietnam Land needs to begin repaying a VND100 billion ($4.78 million) loan from Lien Viet Post Joint Stock Commercial Bank.

The debt needs to be repaid on November 23. If PetroVietnam Power Land can not pay it on schedule, it will have to bear an annual interest rate of 25 per cent and also fine of 150 per cent of the total debt.

If all the apartments are sold at the discounted price, the firm will lose around VND70 billion ($3.34 million). However, this will be the best way for them to settle their debt and avoid the risk of bankruptcy.

The PetroVietnam Landmark project includes high-end apartments, shopping centres and office space in Ho Chi Minh City’s District 2.

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