Vinalines proposes to sell infamous Lash Song Giang fleet
Vinalines proposes to sell infamous Lash Song Giang fleet
State-owned shipping firm Vinalines is striving to tackle a big debt owed by its subsidiary Vinashinlines through selling the infamous Lash Song Giang ship fleet, which has stopped operation for about eight years now.
The company (Vinalines) has just sent a document proposing the Ministry of Transport (MoT) to seek permission from Hanoi People’s Court to sell Lash Song Giang ship fleet to avoid incurring further financial losses.
The proposal was made because Hanoi People’s Court currently retains the petition from Vinashinlines to initiate bankruptcy procedures.
Earlier, in late August 2015, Hanoi People’s Court announced that it received a petition from Vinashinlines with similar contents, causing obstruction to the liquidation process of the specialised ship fleet which was debuted from 2012.
According to Vinalines deputy general director Le Trieu Thanh, after the Court issued a decision on opening the bankruptcy procedure, Vinashinlines has lost the right to tackle its assets.
Lash Song Giang ship fleet initially belonged to debt-stricken Vietnam Shipbuilding Industry Corporation (Vinashin) which was later handed it over to Vinalines under the former’ restructuring plan in 2010.
Vinashinlines was assigned to operate Lash Song Giang ship fleet from 2008. At the time, the fleet was hailed as an advanced means of transportation promising to high economic efficiency.
It was claimed that the 11,000DWT mother ship Lash could carry more than 40 lighters, a loading capacity of 200 tonnes each, and run both sea and river routes. It could receive and deliver goods at locations with limited channel conditions and did not require the use of major goods handling facilities at big ports.
The reality, however, turned sour as after a nine month test-run (carrying cement on the Haiphong-Ho Chi Minh City route) Vinashinlines was forced to stop the fleet’s operation due to inefficiency.
At present, most of the fleet is scattered, with the bulk moored at Quang Ninh port area and the rest at Ha Tinh and Quang Binh provinces, as well as Ho Chi Minh City.
“As Vinashinlines faces financial distress, it can not take care of the fleet for much longer. The ship facilities have incurred serious quality degradation and suffered latent risks,” Thanh commented.
Based on the book value, as of April 30, 2014, Vinashinlines’ Lash Song Gianh fleet was valued at VND365 billion ($16.6 million). The principle debt for the purchase at state-owned Bank for Development and Investment of Vietnam (BIDV) and Vietnam Development Bank (VDB) has surpassed VND300 billion ($13.6 million), and more than $4 million at Vinashin Finance Company Limited.
In Vinalines’ current situation, the only solution to resume the liquidation of Lash ship fleet is in the hands of Hanoi People’s Court.
Vinalines executives shared that they will try to gather all vehicles of the fleet (including mother ships, tug-boats and lighters) at one spot and wait for Hanoi People’s Court to green light selling the fleet.
