Vietnam government refuses to pay state-owned shipbuilders’ debts

The Vietnamese government on Tuesday refused to pay the debts of troubled state-owned Vietnam Shipbuilding Industry Group (Vinashin).

“No one can pay debt for Vinashin,” Transport Minister Ho Nghia Dung told the National Assembly. “The government will not pay … but only support Vinashin in business and production activities to make money to pay [its] debt.”

Dung said as of the end of June, the shipbuilder had assets worth 104.65 trillion dong (5.2 billion dollars) and debts of 4.4 billion dollars. The debt includes a 750-million-dollar state loan in 2005 financed by a bond sale and corporate bonds worth 187 million dollars, issued in 2007.

The international creditors of Vinashin include Credit Suisse, Britain’s Standard Chartered Bank, German-Irish DEPFA Bank and the National Bank of Kuwait.

Vinashin chairman Nguyen Ngoc Su said Friday that the company was not able to repay a 60-million-dollar debt due December 20 and it had asked Credit Suisse to negotiate with foreign creditors to extend the debt to December 20, 2011.

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

At least six executives at Vinashin have been arrested on charges of “deliberately acting against state regulations on economic management to cause serious consequence.” – DPA

Tags: Vietnam Shipbuilding industry, Vinashin