Vinashin owes over $4.2 billion

The Government confirmed that Vietnam Shipbuilding Industry Group (Vinashin) and Vinashin’s management board must review and make clear its responsibility for the group’s 80 trillion dong debt ($4.2 billion).

Restructuring Vinashin was a hot issue at the Government’s monthly press conference on July 2. Pham Viet Muon, vice-head of the Steering Committee on Enterprises Renovation and Development, exclaimed: “Vinashin must operate under the law and well use loans. Vinashin management board must review and define their responsibility. Vinashin cannot only admit its mistake!”

Muon added that, when Vinashin is restructured, some projects will be transferred to the Vietnam Oil and Gas Group (PetroVietnam) and the Vietnam Shipping Lines Corporation (Vinalines).

He argued that these projects will be more effective once they are transferred to PetroVietnam and Vinalines. “PetroVietnam and Vinalines are state-owned groups, so they are responsible for shouldering common difficulties,” Muon concluded.

Vinashin’s current assets are worth 90 trillion dong, with 9 trillion dong of chartered capital, but its total debt is over 80 trillion dong.

“After restructuring, around 20 trillion dong ($1.05 billion) of debt will be transferred to PetroVietnam and Vinalines from Vinashin,” Muon explained.

Concerning Vinashin’s foreign debt of $750 million mobilized through international bonds, Deputy Minister of Finance Nguyen Cong Nghiep affirmed that Vinashin will still pay that debt normally until 2012.

Muon noted that, after the 2008 crisis, Vietnam is among several countries that still have many stable businesses. From 2005 to 2007, Vinashin operated well and signed 166 contracts worth $5-6 billion. It began facing difficulties in 2008 due to the global financial crisis.

The Government asserted that restructuring is not to reduce Vinashin’s debt, but to maintain and develop the shipbuilding industry and to protect the operation of credit institutions and to assure stable jobs for Vinashin employees.

Muon also remarked said that the Government must learn from this experience to more strictly control state-owned corporations and groups.

He confirmed that the restructuring will be independent from inspections of Vinashin.

The Government warned that, after the Vinashin case, many state-owned firms must restructure, including Electricity of Vietnam (EVN). However, EVN will be re-organised to form regional power corporations in the north, south and central regions.

Tags: Vietnam shipping industry, Vinashin