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BUSINESS
IN BRIEF 4/5
Banks
expect higher profits from recovery
Many banks have
planned higher profits this year as they expect better recovery in the
economy.
This year, the
total expected pre-tax profits of 26 banks, which have announced their
business plans this year, were estimated at VND36.7 trillion (US$1.748
billion), rising 5.18 per cent as compared to last year.
The Viet Nam Joint
Stock Bank for Industry and Trade (VietinBank) led in terms of pre-tax profit
plan in 2014 with VND7.28 trillion (US$346.66 million), followed by Bank for
Investment and Development of Viet Nam (BIDV) with VND6 trillion ($285.7
million).
At the shareholders
meeting held last week, Viecombank chairman Nguyen Hoa Binh noted that his
bank expected to gain a pre-tax profit of VND5.5 trillion ($261.9 million),
besides setting aside VND5 trillion ($238 million) for risk provision.
Vietcombank also
targeted its total assets to rise by 11 per cent against last year to
VND520.6 trillion ($24.79 billion). The bank's lending and capital
mobilisation are estimated to increase by 13 per cent to reach VND309.97
trillion ($14.76 billion) and VND384.49 trillion ($18.3 billion),
respectively.
Military Bank (MBB)
and Sai Gon Thuong Tin Bank (Sacombank) also aimed to gain pre-tax profit of
VND3.1 trillion ($147.619 million) and VND3 trillion ($142.8 million),
respectively in 2014.
Another notable
name this year is the Viet Nam Prosperity Commercial JS Bank (VPBank) with a
profit target of VND1.89 trillion against last year's VND1.35 trillion ($64.5
million), surpassing many other listed banks, including SHB and ACB. VPBank's
total assets are also targeted to reach VND155 trillion ($7.38 billion)
against VND121.26 trillion ($5.8 billion) of last year.
According to Vietcombank's
Binh, although the domestic economy is forecast to improve, many difficulties
and challenges still lay ahead. Therefore, his bank will still adopt a
cautious approach with regard to its performance plans this year. He further
pointed out that it has planned to set aside VND5 trillion ($238.1 million)
for risk provision against VND3.5 trillion ($166.66 million) of last year.
However, he remarked that Vietcombank's move towards the market will be also
flexible.
Meanwhile, VPBank
General Director Nguyen Duc Vinh explained that the banking system this year
will undergo continuous restructuring. Therefore, he stated that profits and
size cannot be the top priority, but greater emphasis should be laid on risk
management and business model streamlining to prepare for a leap in the
post-restructuring period.
By the end of the
first quarter of this year, several indications have hinted at dismal
improvements in the profits made by the banks. The unsatisfactory improvement
has been attributed to the difficulties faced by the banks' biggest income
source from credit activities amidst low credit growth.
Furthermore, due to
the impact of the macroeconomic context, especially the real estate, this
year, bad debts will continue to affect the profits of the banking sector,
industry insiders have forecast.
Quang
This step is in
accordance with a new decision taken on offering preferential policies and
support for new projects in the economic zone.
The province will
also offer tax exemption on land use for special projects, including
university dormitories, housing for workers and public works in the fields of
education, healthcare, culture, and sport.
Businesses that
have invested in high-tech will enjoy a preferential tax of 10 per cent in
the initial 15 years of the project.
Comprising 24
communes and five industrial parks spreading across 3,500 hectares, Chu Lai
has been chosen as one of the five key economic zones to be prioritised in
the 2013-15 period. Developments in the zone have created jobs for about
50,000 direct and indirect workers in the locality.
According to
statistics, the Chu Lai Open Economic Zone has so far attracted more than 90
projects with a total registered investment of nearly US$1.7 billion,
two-thirds of which have become operational.
The Mekong
Enterprise Fund II, managed by Mekong Capital, has sold 5.647 million shares
of MobileWorld Investment Corporation, equivalent to 9 per cent of the
company's issued shares, in a pre-listing share placement.
At a placement
price of VND85,000 (US$4) per share, and including dividends received, this
is a 21.8-fold increase from the adjusted price per share of the fund when it
originally invested in the company in 2007.
With about 62.74
million shares in issuance, the company value based on this transaction is
VND5.33 trillion (US$254 million). The company targets a net profit of VND435
billion ($20.7 million) this year.
Shareholders have
approved a plan to list on the HCM City Stock Exchange in July.
After this transaction,
Mekong Enterprise Fund II continues to hold 14.3 per cent of MobileWorld's
shares.
The placement,
managed by Viet Capital Securities Corp, was allocated to six foreign
institutional investors plus Vietnamese retail investors.
Mobile World is
The company's
Dienmay subsidiary has 13 consumer electronics stores, concentrated in the
south and
Launched in 2006,
the Mekong Enterprise Fund II is the second of three private equity funds
managed by Mekong Capital.
The fund made 10
investments of which six have been fully exited. Its remaining four
investments include Golden Gate (restaurants), Mobile World (retail), Asia
Chemical Corp (chemical distribution) and
VN-Belarus
economic ties promoted
A seminar on
promoting trade, investment, tourism and labour co-operation between Viet Nam
and Belarus was held in the latter's capital city of Minsk on Friday.
Vietnamese
Ambassador to Belarus Do Van Mai said the two countries were making efforts
to boost two-way trade and investment, as well as expand connections in industry,
credit and export assistance.
In addition to
tourism and trade ties, labour export has emerged as a field of significant
potential for both sides' businesses. Hoang Kim Ngoc, deputy head of the
Overseas Labour Management Department under the Ministry of Labour, War
Invalids and Social Affairs, suggested Vietnamese companies recruit and train
workers carefully in order to gain a firm foothold in the Belarusian labour
market.
Belarusian
Ambassador to Viet Nam Valery Sadokho noted that bilateral economic relations
were enjoying stable development, with two-way trade currently approaching
US$200 million.
The progress of
negotiations on a free trade area between the Customs Union of Russia,
The seminar also
offered a chance for the two countries' businesses to meet and seek partners.
The countries aim to raise trade turnover to US$500 million by 2015.
Rural
electrification a success story
The national rural
electrification programme that began in 1998 has been a great success with
15.8 million, or 96.7 per cent of rural households, having access to power
last year, Minister of Industry and Trade Vu Huy Hoang said on Saturday.
Addressing an
online review conference, he said the programme has played its part in
developing the country and reducing poverty.
The first phase of
the programme, called the rural energy project, cost over VND3.2 trillion
(US$150.4 million), of which $150 million had been borrowed from the World Bank.
It has benefited
976 rural communes with 550,000 households.
According to
national utility Electricity of Viet Nam (EVN), which has carried out the
programme until now, official development assistance (ODA) from international
donors was a decisive factor in the programme's success.
In the reviewed
period, nearly VND48 trillion VND ($2.25 billion ) has been pumped into the
programme, bringing power to remote and extremely disadvantaged areas,
including border areas and islands, EVN reported at the meeting.
EVN Chairman Hoang
Quoc Vuong commented that the programme has contributed to giving rural areas
a facelift, facilitated agricultural development as well as the sector's
downstream industries like the processing industry.
He pointed to a 6.6
fold increase in agriculture production value in 1998-2013 as proof of the
programme's success.
Victoria Kwakwa,
World Bank Country Director, said many countries were interested in the
success story of
She pledged that her
institution would continue aiding the country by helping it find funds for
infrastructure construction during the 2014-2020 period.
Deputy Prime
Minister Hoang Trung Hai said at the conference that programme's success was
built on the back of strong support from the entire political system and
local people.
The country has
embarked on a national energy development programme until 2020 and beyond,
under which over 98 percent of the population should be connected to the
national grid by 2015 and all rural residents will use electricity by 2020.
This is not going
to be an easy task given that at current average per capita consumption of
1,200 kWh a year, the country is suffering an acute energy shortage.
According to the Ministry
of Industry and Trade, the rural electrification progamme's urgent task is to
supply power for 12,000 remote villages and hamlets and improving the rural
power transmission lines, which will benefit around 7 million households.
The tasks would require
around VND80 trillion ($3.76 billion), the ministry said at the meeting.
The economy of
Speaking at a
meeting yesterday in HCM City, Le Hoang Quan said retail sales and service
turnover reached VND51.8 trillion (US$2.45 billion) in April, up by 3.9 per
cent over March and by 11.7 per cent compared with the same period last year.
For the first four
months, total retail sales and service turnover totalled VND204.5 trillion
($9.66 billion), a 12.1 per cent increase over last year.
Export turnover has
shown an upward trend. In April the city achieved export turnover of $2.42
billion, up by 3 per cent over March and by 22.1 per cent over last year.
For the first four
months, the city attained total export turnover of $8.85 billion, an increase
of 0.6 per cent over the same period last year.
Thai Van Re,
director of HCM City Department of Planning and Investment, said in April the
city authorities granted licenses to 7,622 new businesses with total
investment of VND42.55 trillion (over $2 billion), a 52 per cent increase
compared with last year.
The city also
licensed 98 new investment projects with total registered capital of $701.4
million, a jump of 399 per cent in capital against last year.
To maintain high
growth, the city in May will focus on measures to help businesses, including
improving the links between banks and businesses so the latter can access
low-interest loans.
The city will also
further cooperate with credit organisations to step up the project to
re-structure the banking system and to enhance measures to settle bad debts.
Market must
tackle mid-long term credit
The suggestion put
forward by bankers and economists is aimed at taking the pressure off balance
sheets and volatile capital structures at banks that use short-term deposits
to do mid-long term lending.
Domestic
outstanding loans are equivalent to 104.9 per cent of the GDP, which is 6.5
times higher than the total value of the bond market and triples the
capitalization value of the stock market.
The State Bank of
BIDV Chairman Tran
Bac Ha was cited by the Vietnam Economic Times as saying that banks take
liquidity risks by using short-term deposits to facilitate mid-long term
loans. This practice lays pressure on the central bank to re-finance or
provide additional capital to banks via Open Market Operation (OMO) at more
frequent intervals by the year-end period.
While banks'
sources fall short of credit demand, the capital market is not adequately
developed and in need of urgent assistance.
Government bonds,
which constitute 90 per cent of the bond market, including State Treasury
bonds and notes, Government-guaranteed bonds, local authority guaranteed
bonds, only manage to meet 16 per cent of the credit demand.
Moreover, these
tools are almost held as safe reserves by major credit institutions, such as
BIDV, Vietcombank, Agribank, and Vietinbank until they mature. Credit that
banks injected into government bonds reportedly reached VND65 trillion ($3
billion), up 0.1 per cent by the end of the first quarter this year as
compared to the end of 2013.
After bond sales,
however, mobilised money often makes a round trip within the state treasury
and banks that also bore fees.
Ha suggested that
the State and Government should chalk out plans to use capital mobilised from
bond sales, such as public investment projects.
Tran Hoang Ngan, a
member of the National Advis-ory Council on Monetary and Financial Policies
emphasised that it is not just necessary to fix regulations for the stock
market, but also pay more attention to revive the government bond market.
Ngan proposed
sellers to diversify maturities and to make pre-sale information available to
the public in order to help investors to be better prepared. Post-sale
policies are also required to boost transactions in the secondary market.
In the meantime,
the corporate bond market recorded a good performance last year, and
The Ministry of
Finance plans to mobilise up to VND35 trillion ($1.65 billion) from corporate
bonds this year, up 1.8 per cent against 2013.
Last year, the
volume of corporate bonds sold was VND34.41 trillion ($1.62 billion), up
19.87 per cent against 2012, 37.64 per cent against 2011, and 14.7 per cent
against 2010.
Firms aim
to join global supply chain
Small and
medium-sized enterprises in
Nguyen Phuong Dong,
deputy director of the city Department of Industry and Trade, said
But because of
their low competitive edge, limitations in business vision and strategy, and
lack of resources, SMEs encounter challenges while trying to enter the supply
chain, he said.
For that reason,
most Vietnamese firms are in the lowest rung of the chain, doing assembly and
outsourcing for foreign companies, he said.
Vietnamese firms
are trying to improve their competitiveness with measures like investing in
areas supplying raw materials, improving technology, and co-operating with
foreign partners, he said.
Jeff McLean,
general manager of UPS in Viet Nam, said 25 years ago a company could produce
all the components it needed for its products, but that has changed now, and
companies, especially multinationals, tend to outsource.
The outsourcing
trend among multinationals, coupled with regional integration and free trade
agreements, allow Vietnamese SMEs to participate in global supply chains, he
said.
But to be
competitive exporters, SMEs must be prepared to meet product and service
standards and the new challenges in global trade, he added.
Pham Que Anh,
director of Ha Noi Resource Centre, CUTs International, said that SMEs, with
their limitations in capital, technologies, and market understanding, should
provide services and intermediate inputs to firms involved in the global
supply chain to learn international practices before thinking about exporting
directly.
Loc Le, general
director of An Viet Long Co.Ltd, a company that makes remote control
helicopters and parts, said his company did just that — initially it did
outsourcing for other companies, then did market research, invested more in
technology and personnel, and built brands to directly export products.
From a company that
had just 10-20 employees four or five years ago, it has grown into with 300
employees that exports to many markets, he said.
Having a clear
business strategy, developing strategic products, and understanding target
markets are among the factors that enable businesses to access the global
market, he said.
Local firms should
also improve their cash flow management and enhance productivity and
efficiency to cut costs and promotional activities, Anh said.
They should
co-operate with one another to integrate in the global supply chain, she
added.
Firms
grapple with IP issues
Several domestic
businesses have not paid much attention to the issue of registering for
intellectual property rights and have even hesitated to cooperate with the
authorities in preventing counterfeit goods.
This was revealed
by Do Thanh Lam, deputy head of the Ministry of Industry and Trade's Market
Watch Department. Figures released by the department, at a conference on the
role of enterprises in preventing fake goods in Ha Noi yesterday, showed that
they have annually issued fines for hundreds of thousands of violations
relating to counterfeit goods. In the first quarter of this year alone, the
market watch forces carried out 40,000 checks nationwide and handled more
than 25,000 cases involving fines totalling VND70 billion, or US$3.3 million.
However, Lam said
the number of violations in reality was much higher than the official figure.
"One of the
important reasons is that the enterprises have not registered their
intellectual property right to protect their products," he said.
He added that
several firms had not cooperated properly with the authorised agencies in
preventing fake goods, even for their own products.
According to
Vietnamese laws, businesses which own the products' intellectual property
rights have to cooperate with the authorities in handling any violations as
they have enough legal basis to protect their right.
Statistics from the
National Office of Intellectual Property (NOIP) revealed that last year only
106 out of 3.5 million businesses in
"The number of
applications registered for the rights has reduced. Several firms hesitated
to ask the authorised agencies about handling of the violations due to their
economic situation," said Nguyen Thanh Hong, a representative from the
office.
Hong added that the
enterprises should be aware of their rights and mobilise human resources to
protect their products.
A recent report
showed that fake Chinese goods accounted for 70 per cent of the total fake
goods in the
He was concerned
that
He suggested that
businesses should regularly change their product samples, reduce costs, and
cooperate with the authorities in resolving the situation.
Pesticide
makers seek Indian JVs
Many local
companies, especially members of the Viet Nam Pesticide Association, want to
establish joint ventures with Indian firms to produce high-quality technical
pesticides for the Vietnamese market, according to the association chairman.
Tran Quang Hung,
speaking at a seminar in
The industry wants
to build eco-industrial zones specialising in pesticide manufacture, but
lacks the experience and funds for it, he said.
"So we want to
seek co-operation with
The co-operation
should not stop at trading and must be extended to other areas like
investment and technology because currently it is "unworthy of the
potential."
To establish the
co-operation, a buyer-seller meeting between Vietnamese and Indian pesticide
companies was held in
The head of a
visiting delegation representing 14 Indian companies and president of the
Pesticides Manufacturers and Formulators Association of India, Pradip Dave,
told Viet Nam News that the potential in the Vietnamese market "is
great."
"
"
Joint ventures are
definitely a good idea because in
Every formulator
requires good technical raw material and
The imports have
risen sharply, jumping from 13,000-14,000 tonnes costing around $10 million
in 1990 to 103,500 tonnes and $700 million 2012.
Southern
region faces power shortage
The South region is
facing the threat of a power shortage during the dry season as construction
of power plants is behind schedule.
The south's power
demand between March and June is expected to increase by 15 per cent against
recent figures, according to Viet Nam Electricity (EVN).
The South has to
rely on supply from the central and north regions.
The power
transmission lines in provinces like Binh Duong, Ba Ria – Vung Tau, Dong Nai
and Long An are overloaded, according to a report in the Nguoi Lao Dong (the
Labourer) newspaper.
Meanwhile,
construction has proceeded slowly on many 220 kV power lines and transmission
stations such as Nhon Trach, Phu My 2, Vung Tau, My Xuan, Tay Ninh, Ham Tan
and Duc Hoa.
In recent years,
the demand for electricity for the aquaculture and fruit cultivation sectors
has increased significantly.
The consumption of
power in the Delta's coastal provinces of Ben Tre, Tra Vinh, Soc Trang, Bac
Lieu and Ca Mau in 2012, for example, rose by 50 per cent against 2011. In
2013, it increased by 49.6 per cent against 2012.
The investment in
new power projects cannot keep up with demand, EVN says.
To ensure supply,
EVN has told the Southern Power Corporation to work with provinces to find
capital to invest in power line projects that serve business production.
Companies and local
residents have also been asked to use power efficiently.
Last month, EVN put
into operation Turbine 1 of the Vinh Tan 2 Thermopower Plant and Turbine 2 of
the Hai Phong 2 Thermopower Plant.
It also put into
use 48 projects with 500kV, 220kV and 110kV transmission lines that have a
total length of 705 km.
EVN has also asked
the National Power Transmission Corporation to ensure the operation of a
high-voltage transmission line system and complete construction on key power
projects by the end of this month.
The key projects
are 500kV power transmission lines such as Quang Ninh – Mong Duong, Quang
Ninh – Hiep Hoa, Phu Lam – O Mon and Pleiku – My Phuoc – Cau Bong and the Cau
Bong 500kV transformation station.
Tran Viet Ngai,
chairman of the Viet Nam Energy Association, told Nguoi Lao Dong that EVN had
prepared all measures to supply power for the south in the dry season.
EVN was focusing on
completing the Pleiku – My Phuoc – Cau Bong 500kV power transmission line
project to transport power from
This line had an
important role to ensure power supply of 2,000 MW for the South, as many
power plant projects in the region were behind schedule, he said.
EVN also said that
it had been operating gas-fuelled turbines at full capacity.
Several hydropower
plants, including Dong Nai and
About one million
households across the country do not have access to the national power grid,
accounting for four per cent of the country's homes.
The Power
Regulatory Authority under the Ministry of Industry and Trade reported that
the national power grid reached all districts and 98 per cent of local
communes across the country.
Vice head of the
power regulatory authority, Dinh The Phuc, said that huge investment was
needed to expand the power coverage to all households without electricity, mostly
on islands and remote mountainous areas.
Minister of
Industry and Trade Vu Huy Hoang told members of National Assembly Standing
Committee earlier this month that the Government had approved VND30 trillion
(US$1.4 billion) to ensure the national power grid reached all households in
remote areas across the country by 2020.
NA Deputy Thach Du
from
This resulted in
higher production costs and lower competitiveness, he said.
NA Deputy Le Dac
Lam from
Last Saturday,
Electricity of Viet Nam started work on a 81km power line to provide
electricity to five islands in
The work is
scheduled to finish by the end of this year, with 10,000 households on the
islands of Minh Chau, Quan Lan, Ban Sen, Ngoc Vung and Thang Loi having
access to the national power grid. Earlier this year, a similar project was
completed to connect
Southern
industrial zones need revamp
Long-term solutions
to ensure the sustainability of industrial zones in the southern region are
long overdue, heard a conference of leaders of departments of industry and
trade from 20 provinces and cities last week.
Nguyen Nguyen
Phuong, of the HCM City Department of Industry and Trade, told the conferees
that the city had developed a plan that could be adopted by other provinces
to develop industrial zones by 2020.
"We will stop
the development of any industrial zone that has incomplete infrastructure or
contains residential areas within its borders," he said.
He conceded that
the cost of wastewater treatment facilities in industrial zones required a
large amount of capital, and suggested that the Government use funds from the
state budget to invest in such equipment.
Capital could be
recovered, he said, by collecting fees (called environment fees) from
businesses operating in the zones.
He said the city
had asked the Ministry of Industry and Trade to give more autonomy to
management boards of industrial and export processing zones in
They are currently
managed by either the Ministry of Industry and Trade or the Ministry of
Planning and Investment.
The city has also
recommended that specialised industrial zones be established for investors
who have advanced technologies.
In addition, it
also suggested establishing satellite businesses that provide support
products and services for the region.
Nguyen Minh Toai,
director of Can Tho's Department of Industry and Trade, has asked the Can Tho
administration to approve a project to move factories that cause pollution
out of residential areas.
Can Tho has also
requested that the Government help build infrastructure in industrial zones.
Meanwhile, Nguyen
Van Huu, deputy director of
Solutions needed
for the power-savings programme include investment, training, technologies
and cooperation, he said.
Also speaking at
the conference, Le Duong Quang, deputy minister of Industry and Trade, said,
"In the long run, the region must strengthen linkages with the rest of
the country to lure more investment to the area."
"Most of the
provinces and cities in the region are not cooperating with each other well,
which has caused conflicts of interest among localities," Quang told
Viet Nam News.
Quang said the
region continued to struggle as the economy slowly recovers, affecting
industry and trade.
He urged local
departments of Industry and Trade in southern localities to complete
development plans for the power and petrol sectors as well as industrial
zones and other trade sectors.
The increasingly
critical problems of environmental protection and food safety and hygiene,
especially in the Southern region, were among the other pressing issues
discussed at the conference.
The deputy minister
noted that many processing firms such as leather and footwear as well as
industrial zones discharge waste and contribute to air and water pollution.
"The Ministry
of Industry and Trade has also asked local departments to work closely with
the power sector to resolve site clearance issues related to the development
of power projects," he said.
With the current
development of industry and trade, there will be a serious shortage of
electricity for industrial production by 2018, he said.
"Export
businesses should also be more aware of trade remedies, such as anti-subsidy
or anti-dumping cases, which major export markets can impose," he said.
He also emphasised
the important role of associations in helping local exporters deal with
anti-dumping and anti-subsidy lawsuits.
Covering an area of
71,963 square kilometres and accounting for 21.75 per cent of the country's
area, the Southern region has 33.8 million people, or 38 per cent of the
country's population.
The region has two
major cities –
The first of its
kind, the conference was organised by the ministry and
As part of the
conference, more than 200 Vietnamese companies participated in an industry
and trade fair that ended today in Phan Thiet in the central
The Southeastern
Region Industry and Trade Fair and Exhibition 2014 is organised by the
Ministry of Industry and Trade and the provincial people's committee.
The five-day event aims
to attract investment by showcasing the socio-economic achievements,
potential and investment incentives of
It also aims to
promote exchange between enterprises to help them seek partners and
investment opportunities, increase sales, improve the quality of products,
and create new products and enhance their competitiveness.
The fair, featuring
nearly 600 booths, focused on Vietnamese goods and services with 90 per cent
of the products and services made in
Vinalines
officially launches restructuring
The Ministry of
Transport reportedly just set progress targets for the restructuring of
Vinalines, a leading domestic shipbuilder.
Accordingly,
restructuring of parent company Vietnam National Shipping Lines (Vinalines)
is underway and an IPO will be held in the first quarter of next year.
Vinalines members
include the
Vinalines has
proposed halting the restructuring of its main shipping businesses, including
Vinalines Shipping, Vinalines Container Shipping and Vinalines Haiphong
Maritime Services.
These financially
dependent firms will become a structural part of the parent company through
the restructuring process.
As well as
strengthening its Equitisation Steering Committee, in late March Vinalines
submitted its plan for selecting consultants to valuate the company.
Accordingly, to up
the pace of restructuring the company the MoT required consultant bidders
have experience in Vinalines core areas including shipping and seaport
exploitation and with restructuring other state-owned corporations.
“Vinalines will be
in shambles in the coming years unless strong measures are taken to push
forward its shake-up,” said the company’s new general director Le Anh Son.
Though audited
figures are not yet available, it is nearly certain that Vinalines was bogged
down in losses last year due to poor shipping performance.
The firm is
forecasted to have sustained losses for its fourth consecutive year in 2013
surpassing VND1 trillion ($47.6 million).
“2013 was a tragic
year for the shipping business. Though returns in the fourth quarter improved
on the rest on the year, only ships bigger than 100,000DWT were profitable,
and Vinalines has few such ships,” Son said.
Discussing
solutions to the problem, Son said “The biggest challenge in restructuring
our fleet is the high investment ratio. Many of our ships were invested in
when shipping was at its peak and therefore investment was costly. If we wait
for the shipping market to recover, our fleet will get even older and be
burdened by expensive maintenance costs. Vinalines must accept selling at a
loss to alleviate its financial burdens.”
To ensure the
success of its IPO, one of Vinaline’s core tasks this year is completing
financial restructuring.
The firm has thus
far succeeded in rescheduling debts totalling $196 million from foreign
credit institutions and VND43 trillion ($2.04 billion) from local
institutions.
Most of the debts
will be exempt from interest payments from 1-3 years, but the firm
realistically needs 5-6 years, so it still faces massive pressure.
“We still owe the
same amount of money and a short extension is not enough to support our
restructuring efforts,” Son explained.
One encouraging
sign was local commercial banks such as VietinBank reportedly agreeing to
swap loans for shares in the company to support its restructuring efforts.
The company is
hoping other local creditors will take a similar approach.
MoT chief Dinh La
Thang noted this year would mark a turning point in Vinalines’ development.
“Vinalines can
equitise successfully if it has an accurate valuation. It has significant
advantages in terms of its seaports, a long-established brand and its
leadership role in the domestic shipping sector. These are all appealing to
investors,” Thang said.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 3 tháng 5, 2014
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