PVFC announces merger plan with Western Bank

PVFC announces merger plan with Western Bank

The PetroVietnam Finance Joint Stock Corp (PVFC) have announced a merger plan with Western Bank which is facing financial difficulties and need urgent restructuring.

The plan will be discussed in detail in a shareholders meeting on July 26. The outlines for the merger have already been approved by the shareholders.

Currently, PVFC has VND6 trillion (USD288 million) in charter capital and Western Bank has VND3 trillion.

The PVFC's shareholders meeting in May, saw a majority agree to a plan that will turn PVFC from a finance corporation into a joint stock commercial bank.

After the merger, PVF shares on HCM City Stock Exchange (HSX) will be de-listed. In addition the National Oil and Gas Group's (PVN) stake in PVFC will be reduced from 78% to 52%.

PVFC has recently divested from many companies. For example, they sold 5 million shares of PetroVietnam Construction JSC or tried to sell 5 million shares of Pha Lai Thermal Power JSC.

In the first quarter, PVFC's revenue was 43% lower than the same period last year. Meanwhile the cost to prevent credit risks increased by VND132 billion because the loans to Vinashin and Vinalines turned into over VND2 trillion of bad debt.

Western Bank is also facing problems from VND1,118 billion overdue interbank deposits in First Commercial Bank, Saigon Bank, Vietnam Tin Nghia Bank and Trust Bank.

Their equity decreased to VND2.31 trillion, less VND690 billion than the required charter capital.

vir