Vinashinlines’ multibillion-dong ships sit and rust after bankruptcy decision

Vinashinlines’ multibillion-dong ships sit and rust after bankruptcy decision

 Having a book value of VND1 trillion and original investment capital of VND1.6 trillion, the ships of Vinashinlines may eventually be sold at scrap iron prices as complicated bankruptcy procedures have stalled its operations.

Vinashinlines, a large ocean shipping firm, still has not found a perfect solution to deal with its fleet over the last five months, since the day the Hanoi Court released the decision to handle the firm’s filing for bankruptcy.

Half of the ships owned by Vinashinlines had had to stop operations because of their bad conditions. These include LASH (lighter aboard ship) fleet and Green Sea, New Sun and New Star Ships.

Vinashinlines’ fleet, which once comprised over 10 ships with the total tonnage of over 200,000 tons, now has only four ships still in operation.

In early 2014, Minister of Transport Dinh La Thang released a decision on bringing Vinashinlines to bankruptcy after finding that the large shipping firm could not pay debts.

In mid-March 2014, the managers of the firm officially authorized lawyers to file for Vinashinlines’ bankruptcy at the Hanoi Court.

Vinashinlines once offered to sell the ships a year ago, but it could not find a buyer. In mid-March 2014, it had to stop the sale when the Hanoi Court decided to handle the case.

As a result, the ships have been sitting idly for years at the ports of Quang Ninh, Hai Phong and HCM City, or “migrating” to Cambodia.

Vinashinlines has repeatedly sent documents to the Hanoi Court and the Ministry of Transport, requesting to give permission to resume the sale of the ships.

However, a judge of the Supreme Court said that under the current laws, Vinashinlines must not sell any assets, if the court has handled the bankruptcy proceedings, even if Vinashinlines’ creditors agree to the sale.

The provision, according to the judge, aims to prevent involved parties from dispersing and hiding the assets.

Under current laws, the disposal of enterprises’ assets that have gone bankrupt will be decided by the asset liquidation team which comprises creditors and representatives of the bankrupted enterprise. The assets will be sold through auction.

Four ships, including Vinashin Liner 1, Vinashin Liner 2, Cai Lan 4 and New Energy, still operate, with turnover expected to reach VND20 billion by the end of the year.

In a report sent to the Hanoi Court, Vinashinlines estimated that the four ships still can bring profit of VND9.2 billion after deducting expenses in the second half of the year.

However, Vinashinlines said the court has not given instructions about the next step it needs to take.

If Vinashinlines has to stop its business activities while waiting for the court’s decision, it could incur big losses, according to Vinashinlines’ CEO Nguyen Que Duong.

“The certificates on the ships’ safety will expire. If so, we can only sell the ships as scrap iron, not as ships in good condition,” Duong said.

Meanwhile, Vinashinlines has to pay VND400 million a month to preserve each ship.

vietnamnet