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|Runaway investors caused a loss of $136 million to Agribank|
The assets on auction (including textile and garment accessories and products as well as entire equipment and production lines) has a starting price of around VND372 billion ($16.9 million), with a deposit requirement of 10 per cent of the starting value.
Lifepro Vietnam’s $300-million Luxfashion clothing complex equipped with European-technology is one of Vietnam’s largest textile and garment factories, located in Gian Khau Industrial Zone. The facility was locked down in early September 2012, only six months after official production.
The Luxfashion complex kicked-off construction in 2011. At the end of the same year, some production workshops in the complex began test runs and in late March 2012, Lifepro Vietnam exported its first shipment to Europe. The peak employment was 920 local workers.
However, in August 2012, only five months after its first export shipment, the complex stopped operations and all foreign leaders and specialists of Lifepro Vietnam JV returned to their home countries.
Earlier in June 2012, the Vietnamese lender of the project, South Hanoi Agribank, had lent nearly VND3 trillion ($136 million) to the JV. Runaway investors had left a loss of $136 million in the form of unpaid loans.
Lifepro Vietnam, with the legal investment capital of $50 million, was licensed in January 2011 by four shareholders: Hong Kong Golden Principal Investment (63 per cent), Canadian investor Ahmed El Fehdi (30 per cent), domestic private firm Lifepro Vietnam (5 per cent), and Vietnam’s state-owned Interserco (2 per cent).
|Project’s bad fashion statement
The runaway foreign investors of Lifepro Vietnam’s Luxfashion textile and garment complex, leaving $150 million in debts behind, have underscored the ugly side of foreign-invested projects that go wrong.