Vinawaco’s restructuring in dire need

April 16, 2012 | 14:14
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A radical restructuring plan is crucial to help Vietnam’s giant transport work contractor Vinawaco escape its debts.

The Ministry of Transport (MoT) will craft a restructuring plan to save  Vinawaco, Vietnam’s leading seaport construction and marine channel dredging business. Once a giant contractor in the transport sector, Vinawaco is now bogged down with debts and faces going bust due to poor investment and management.

Vinawaco was subject to a special Ministry of Finance (MoF) inspection and is listed among state corporations with highest transport sector loss rates.

Vinawaco’s latest auditing reports for 2010 revealed the corporation incurred accrued losses amounting to VND586.3 billion ($28 million), almost triple its chartered capital and the debt to ownership capital ratio of 14.5 was five times higher than the permissible level.

To boost its competitive edge, Vinawaco submitted a restructuring plan for 2012-2015 to the MoT, according to which the firm woud equitise member companies Waterway Dredging Company 1, Waterway Dredging Company 2, Sea Dredge Company 2 and Waterway Works Company 86.
These four businesses have wrapped up their financial restructuring commitments.

In respect to Vinawaco, its equitising plan will begin from 2013 and be finalised in 2015 when the parent company will shift into a holding company with VND1.5 trillion ($71.4 million) in chartered capital, in which the state will hold 44 per cent.  

According to the MoT, with technological advancement, cutting-edge equipment and 5,400 skilled workers, Vinawaco remains one of the transport sector’s leaders in waterway works construction despite being in dire straits.

“This is one of the reasons the MoT has strived to help Vinawaco get through this tough development period, instead of forcing it to go bust,” said MoT Minister Dinh La Thang. In late 2011, the MoF’s Debt and Asset Trading Company (DATC) settled a VND170 billion ($8.1 million) debt of Waterway Works Company 86, which was responsible for around one-third of Vinawaco’s accrued losses.

 In dealing with the VND180 billion ($8.5 million) debt associated with purchasing the Pacific ship, Vinawaco is proposing the MoF to either write off the loan interest and subsidise exchange rate difference worth VND150 billion ($7.1 million) from putting the ship into service or sell the ship.

By Anh Minh

vir.com.vn

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