Vinashin restructuring plan reducing debt 38pct wins approval from Vietnam

Vietnam Shipbuilding Industry Group, restructuring after overexpansion led to near-collapse, won government approval for a turnaround that includes paring debt 38 percent and transferring units to other state-owned companies.

Vinashin’s debts will fall to 53 trillion dong ($2.7 billion) under the plan, which ministries will work on through 2013, the government said in a November 19 statement on its website. The shipyard’s debts totalled 86 trillion dong in June.

Vietnam National Shipping Lines also will take over orders for 20 ships that Vinashin customers had canceled to help the yard maintain production, according to a separate November 19 statement. The government has arrested at least five people, including Vinashin’s ex-chair, as it investigates financial difficulties at the shipyard that followed the global recession and expansion into areas ranging from securities to tourism.

The shipyard plans to cut its number of units to 43 from 259 under the restructuring plan, according to the statement on debt. Assets will drop to 68 trillion dong from 104 trillion dong as of June. The government said previously that some assets will be transferred to state-controlled Vinalines and Vietnam Oil & Gas Group.

Vinashin plans to deliver 57 vessels, worth about $573 million, this year, according to the debt statement. It had completed 36 ships, valued at $280.6 million, by November 18.

The shipbuilder “was facing the risk of bankruptcy” in June, according to an August 4 government statement. – Bloomberg

Tags: Vietnam Shipbuilding industry, Vinashin