Vietnam bank discloses Futa Bus Lines’ $134mn bad debt
Vietnam bank discloses Futa Bus Lines’ $134mn bad debt
A Vietnamese bank has revealed that a popular Ho Chi Minh City bus line is among its major bad debtors, with disputes over the company’s financial obligations only solved following legal proceedings.
Futa Bus Lines, the operator of numerous routes connecting Ho Chi Minh City with southern, south-central, and central Vietnam, owes a total of VND3 trillion (US$134 million) in nonperforming loan payments to Construction Bank, the lender announced on Wednesday.
The loans were disbursed from ten borrowing files the transportation firm closed with Construction Bank’s predecessor, TrustBank, between 2010 and 2011.
TrustBank was acquired by the State Bank of Vietnam under a symbolic deal of zero Vietnam Dong in February 2015 to rescue it from collapse over losses. The lender then resumed operation in April that year under the new name as a state-owned credit institution, instead of a joint stock commercial bank.
Construction Bank took Futa Bus Lines to court over the massive unpaid debt in March 2015, and is preparing further court proceedings to handle assets of all Futa-related borrowers by the end of this year.
The lender said Futa Bus Lines has been one of its biggest debtors since the TrustBank era. The company has used most of the loans to invest in its 45-seater passenger bus fleet, as well as various realty projects.
After acquiring TrustBank, the State Bank of Vietnam assigned Vietcombank, the country’s top lender by market value, to help restructure the beleaguered lender.
With the personnel and administrative help of Vietcombank, Construction Bank has made forward progress, particularly in resolving nonperforming loans.
