Ministry may pull the plug on Dung Quat Shipbuilding Industry Co., Ltd
Ministry may pull the plug on Dung Quat Shipbuilding Industry Co., Ltd
As reported by newswire vneconomy.vn, bankruptcy is one of the options for Dung Quat Shipbuilding Co., Ltd., Vietnam National Oil and Gas Group (PetroVietnam)’s shipbuilding subsidiary.
The Ministry of Industry and Trade in its report on developing industries in the last three months of the year outlined three possible solutions for the plant.
First, the ministry proposed restructuring the plant, while leaving the question whether it would remain a subsidiary of PetroVietnam open
The second solution is to put the company under the management of another. This transfer would be planned by PetroVietnam.
The third is to let the company go bankrupt.
The ministry added that it is going identify individuals and groups responsible for the shipbuilding company’s failure.
Dung Quat Shipbuilding Industry Co., Ltd., established in 2006, was a member of Shipbuilding Industry Corporation (SBIC), formerly Vinashin. In 2010, the company was transferred under the management of PetroVietnam.
The company has been incurred billions of dollars in cumulative losses . According to PetroVietnam’s financial statement, as of the end of 2015, PetroVietnam was holding 100 per cent of Dung Quat Shipbuilding Industry Co., Ltd., equal to a capital of VND1.99 trillion ($90 million). PVN has made a 100 per cent provision for the risk of this investment.
The report also mentioned other major projects invested by PetroVietnam, including Nghi Son Refinery, Dinh Vu Polyester Fibre and Yarn Plant, and a number of struggling biofuel plants.
Specifically, the MoIT asked PetroVietnam to build a plan to consume the refinery’s products. Earlier, PetroVietnam complained about the big loss this would cause, but the plea fell on deaf ears at the ministry.
As for Dinh Vu Polyester Fibre and Yarn Plant, the MoIT asked PetroVietnam to negotiate with potential partners to be involved in the plant’s management. For the ethanol plants, the MoIT asked PetroVietnam or PVOil to sign cooperation contracts with localities and companies on distributing its E5 fuel product. PVOil should also look for another investor to buy its stake in PetroVietnam Bio-Fuels JSC (PVB).
