Vietnam pledges to rescue shipbuilding company

Vietnam’s Communist Party pledged to rescue the ailing Vietnam Shipbuilding Industry Group (Vinashin) to shore up the country’s maritime industry, state media reported Monday.

“The Politburo has asked the group to be restructured immediately to focus on shipbuilding and repairs, and improving workers’ skills,” the state-run newspaper Vietnam News said.

Vinashin got into financial trouble when it diversified outside its core business and the global recession hit its revenue, leaving it unable to keep up with its debt repayments, the government said.

As of the end of June, had total assets of 90 trillion dong (4.8 billion dollars) and debts of 86 trillion dong, the government said.

The mismanagement had caused salary cuts for more than 70,000 employees and 5,000 workers were dismissed.

Police last week arrested Vinashin chairman Pham Thanh Binh, 57, for alleged mismanagement that led the company to the brink of bankruptcy.

Several economists criticized the government for favouring Vinashin, including a 750-million-dollar state loan in 2005 financed by a bond sale. The move was widely criticized as unjustified state support.-Copyright DPA

Tags: Vietnam shipping industry, Vinashin restructure