State leasing firm could sink in debts

An investment of nearly $300 million to buy 77 ships for lease has left state-owned Agribank Leasing Company No 2, or ALC2, with a debt of $273 million from lessees.
Ten of its vessels are detained in foreign ports while some others remain docked for a long time.

One of them is Bien Nam, which ALC2 leased to Bien Nam Maritime Co for 75.3 billion dong ($3.6 million). During a recent trip, the ship was detained in Indonesia’s Padang Port since the lessee had not paid docking fees.

Bien Nam Co owes ALC2 more than 73 billion dong ($3.6 million) plus an interest of 28 billion dong.

Seahome Sapphire, leased to Gia Hai Maritime Transporting Co for 90 billion dong, is being detained in the Maldives for a similar reason.
The company owes ALC2 nearly 110 billion dong.

Gia Hai Co charters another ALC2 ship, Seahome Shine, which is being held in Malaysia.

Gia Hai Co has little chance of clearing its debts to ALC2, which is also likely to lose the three vessels since they will be put on sale under maritime law.

Last year Trai Thien Co Ltd leased Trai thien 08, Trai Thien 68, Trai Thien 86, and Dong Thap 18 from ALC2 for tens of billions of dong.
But all four remain berthed for nearly a year in HCM City since Trai Thien has gone bankrupt.

Nguyen Tan Son, captain of Dong Thap 18, which is in bad shape with its whole deck covered in rust, said the ship had only made eight trips since last year.

The ship cost $3.4 million to build. As for Trai Thien 68, captain Vu Thanh Van said its last trip was on May 21 and it had since been docked first in Can Tho and then in HCM City.

“The ship has, in fact, made only two trips to Malaysia and two domestic trips since being leased,” he said.

Trai Thien 08 and Trai Thien 86 are in no better condition with their sides rusting and machinery broken down.

Hoang Ngoc Tien, ALC2′s CEO, told Tuoi Tre that his customers had asked ALC2 for financial assistance to clear the debts, settle disputes, and bring the ships back.

ALC2 had sought State Bank of Vietnam permission for this but was rebuffed since its proposal to cover customers’ expenses “had no legal basis.”
“Therefore, even though we are willing to pay, we still cannot recover the ships,” he lamented.

The ships would be sold by the foreign maritime authorities, he said.
“We have given up.”

Billions of dong for rescuing ship In 2007 ALC2 leased Nam A to Nam A Co and the ship was detained in Pakistan since the Vietnamese firm was sued by a US-based company for not paying for fuel.

The latter asked for $100,000 to release the ship and ALC2 had to put up $87,800. “But we have yet to be repaid by Nam A Co,” Tien said.

ALC2 spent another 10 billion dong to get Phuc Hai 5, which it leased to Hai Phongbased Phuc Hai Co last May, from Indonesia.

“The severely dilapidated ship is now docked in Hai Phong and our company has to pay a large sum as docking fees every day.

“And there seems no chance for us to get Phuc Hai Co to pay up.” Power Monopoly – Tuoitre

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial