Lion hits out at Vietnam shipbuilder

The Lion group has blamed problems at Vietnam’s scandal-hit shipbuilder Vinashin for the failure of a multi billion dollar joint venture.

The $9.8bil project by state-owned Vietnam Shipbuilding Industry Group (Vinashin) and Lion would have included a steel mill, power plants and a sea port in the southern Vietnamese province of Ninh Thuan.

Vietnamese officials said last month that the project’s investment licence had been revoked because investors did not fulfil their commitments.

“The Lion group wishes to clarify that the lack of progress is due to the financial and management issues affecting Vinashin which has not been able to respond on the continuity of the project,” Lion said in a statement to AFP.

It added that Lion required certain conditions, including adequate import tariff protection, to be in place for such a large investment.

“As these requirements have not been met, the group has therefore decided not to proceed with the project,” it said.

Pham Dong, head of the Ninh Thuan planning and investment department, had earlier told Dow Jones Newswires that Lion held a 75 percent stake in the project but had difficulties arranging funding. There was also “trouble” with the chosen technology, Dong said. – AFP

In December Vinashin, whose debts of more than $4bil pushed it to the brink of bankruptcy, reportedly defaulted on the first $60mil instalment of a $600mil loan arranged by Credit Suisse in 2007.

Police are investigating and have arrested Pham Thanh Binh, Vinashin’s former chair, who is accused of violating state economic management regulations.

Tags: Vietnam business, Vietnam stock news