VEC secures charter capital boost for 2024-2026

VEC secures charter capital boost for 2024-2026

Deputy Prime Minister Ho Duc Phoc signed a decision on June 13 approving the plan to increase the charter capital of Vietnam Expressway Corporation (VEC) for the period 2024-2026.

Decision No.1145/QD-TTg permits the company’s charter capital to reach almost VND39.4 trillion (US$1.57 billion) until the end of 2026, a VND38.25 trillion (US$1.53 billion) increase from the approved level until the end of 2023.

The additional charter capital will be sourced from two channels: VND1.56 trillion (US$62.4 million) from the company's development investment fund, and VND36.7 trillion (US$1.47 billion) from state budget allocations. The government funding has been specifically disbursed to support five ongoing expressway projects under VEC's management.

The DPM has directed the Ministry of Finance and VEC's Board of Members to implement the charter capital increase in strict accordance with legal regulations, while ensuring effective management and utilisation of state capital and assets to prevent any losses. Furthermore, the directive emphasises the need to improve VEC's operational efficiency and performance following the additional capital infusion.

The increase means VEC is now in the top five of the country's 19 major state-owned corporations with the highest equity capital.

VEC is now the leading expressway developer in Vietnam. In the 2020-2024 period, VEC's total revenue reached VND31.25 trillion ($1.25 billion), and profit after tax exceeded VND3.4 trillion ($137 million).

Hanoi authorities announced Decision No.2952/QD-UBND on June 14, approving the selection of VEC and its consortium Cityland – Sunflower – VEC – Horizon to carry out a component project worth VND56 trillion ($2.24 billion) as part of the Belt Road 4 project.

The expressway is expected to be completed in 2026 and put into operation in 2027. The toll collection period to recover capital as proposed by the investor is just over 21 years.

VIR