(Bloomberg) -- The turmoil in Vietnam’s property sector continues, with creditors embroiled in a dispute with developer Novaland Investment Group Corp. after it failed to pay interest on a $300 million bond.

The company is committed to resolving the impasse with holders of its 2026 overseas convertible note in “a cooperative spirit, aiming to find optimal solutions that safeguard the interests of bondholders,” Novaland said Tuesday.

The statement came a day after an ad-hoc group of bondholders accused the builder of foot-dragging and urged it to reach an agreement so as not to damage international investors’ confidence in the country.

Novaland is one of Vietnam’s largest developers and has become a prominent example of real estate firms in the country late with bond payments, at a time when China’s property crisis is also showing signs of intensifying.

The Southeast Asian country’s property sector has come under pressure after a state crackdown on debt issuance following allegations of illegal activities. Novaland didn’t make the interest payment due on its convertible offshore debt in July and has also sought to extend the maturities of other bonds.

“Novaland has proposed and is currently negotiating with the ad hoc group of bondholders on a debt restructuring plan that aligns with the company’s current financial capacity and the timeline for business recovery,” it said.

Lower interest rates, approvals for new projects, and a pick up in buyer sentiment may help the real estate market, said Troy Griffiths, deputy managing director of Savills Vietnam Co.

Novaland’s 2026 convertible dollar bond was trading at a deeply distressed level of 30 cents on the dollar on Tuesday, according to data compiled by Bloomberg. The firm’s shares have also slumped about 26% this month. 

--With assistance from Mai Ngoc Chau and Nguyen Kieu Giang.

(Adds analyst comment in seventh paragraph)

©2023 Bloomberg L.P.