Vinashin to spend $300m in bonds to pay debt

The Deputy Prime Minister Nguyen Sinh Hung has instructed the Finance Ministry to consider implementing Vinashin’s proposal to spend US$300 million in sovereign bonds to pay off its debt at Natixis bank.

Viet Nam earlier this year raised $1 billion from its second global bond sale, where it offered 10-year bonds at 6.95 percent yields.

These bonds were designated to support energy and infrastructure projects that will support growth in an economy that suffers from a foreign currency shortage, high inflation and a widening trade deficit.

The debt-laden shipbuilder was instructed to work closely with Viet Nam National Oil and Gas Group (PetroVietnam) to negotiate with Natixis bank concerning the debt’s bottom value and payment plans.

The shipbuilding giant has transferred a portion of its debt payment obligations to PetroVietnam in accordance with Decision No926 that was passed by the Prime Minister on June 18.

Vinashin’s debts totalled VND86 trillion ($4.48 billion) in June against that company’s VND90 trillion ($4.69 billion) in charter capital. The company’s total assets are estimated at VND104 trillion ($5.3 billion).

Vinashin was the single recipient of the proceeds from Viet Nam’s maiden $750 million sovereign bond issue in October 2005. –VNS

Tags: Vietnam Shipbuilding industry, Vinashin