Vinalines’ debt-restructuring negotiations reach an impasse
Vinalines’ debt-restructuring negotiations reach an impasse
The Vietnam National Shipping Lines (Vinalines) has reached agreements with two of its 22 creditors on debt restructuring, but negotiations since then have stalled.
Sources said Vinalines and the Debt Asset Trading Company (DATC), a super-company put under the Ministry of Finance’s management, have agreed to DATC’s purchase of Vinalines’ debts from banks.
DATC’s 2014 finance report showed that the company successfully negotiated the purchase of Vinalines’ debts from Vietcombank (VND381 billion) and HSBC (VND63 billion), at prices equivalent to 30 percent of the debt value.
However, with the low price, DATC is having difficulty negotiating with foreign banks, French Natixis, Malaysian May Bank, Bangkok Bank and Vietnamese Viet A, Ocean Bank, on debt worth VND2 trillion.
Of the debts, the one at Natixis Bank is the biggest, worth VND1.1 trillion in both principal and interest. The French bank provided a loan to the Vietnamese shipping firm to fund the purchase of two vessels several years ago.
Vinalines in the past put high hopes on DATC to help it restructure the debts in the most reasonable way.
Vinalines’ CEO Le Anh Son once told the press that the solution of settling debts via DATC was “highly feasible”.
The Vinalines’ finance report released on January 15 showed that the total debts incurred by the holding company had reached VND11.1 trillion by the end of June 2014.
This included over VND7 trillion it owed to domestic commercial banks and institutions, and VND2.3 trillion to foreign institutions.
The remaining is owed to the Vietnam Development Bank (VDB), a bank specializing in providing long-term loans to encourage investment and development.
The figure had fallen by VND1.7 trillion by the end of 2014, which means that Vinalines still has to deal with the debt worth over VND9 trillion.
Vinalines recently asked the government for permission to use money collected from the equitization of some seaports, estimated at VND700 billion, to pay debts.
The shipping firm’s managers expressed concerns that the shipping firm would not have enough money to pay DATC, its new creditor, if it does not have the right to use the money as it wants.
A banker said that if Vinalines’ proposal is approved by the government, then the company would have cash to revive production and business after the world’s shipping market shows signs of recovery.
The banker said that the solution would allow Vinalines to “swim by itself”, while there would be no need to issue bonds like the solution used for the shipbuilder Vinashin.
