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|Vietinbank is putting NEM Trading JSC's $5 million debt secured by its inventory on sale|
Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) on September 6 announced to sell the debt of VND111 billion ($4.9 million) backed up by the firm’s inventory which was worth VND33.9 ($1.5 million) as of June 30, 2018.
Accordingly, NEM Trading JSC’s debt as of August 22 included VND61 billion ($2.7 million) in principal, VND35.3 billion ($1.56 million) in interest from the loan term, and VND14.5 billion ($641,592) in overdue interest.
Vietinbank stated that individuals and organisations can register to buy the debt or the security until September 7.
However, there has been a misunderstanding, as many readers following the news have mixed up the NEM fashion brand with NEM Trading JSC and were led to believe that the former was running high debts, which NEM Fashion JSC was quick to rebuff.
Whle NEM Trading JSC is indeed a subsidiary of NEM, NEM’s representative told VIR that the issue does not impact its business at all. He also said that NEM Trading JSC, a company specialised in manufacturing clothes, took up a loan from Vietinbank six years ago and the issue is not related to the NEM fashion brand.
The misunderstanding also came as a surprise, because over the past few years NEM Fashion JSC has been performing well, with a 20 per cent annual growth rate. Its revenue in 2017 was expected to hit $26 million.
Due to its good business prospects, in late 2017, Japanese clothes distributor Stripe International Inc. announced plans to purchase the domestic brand. The Japanese firm’s first step was the establishment of a subsidiary in Vietnam in last September, headquartered in the capitol’s Long Bien District, with the charter capital of VND175 billion ($7.74 million).
The representative also told VIR that they are currently in negotiations and have just reached an agreement related to a capital contribution.
NEM Trading JSC was established in 2002. Currently, NEM owns 44 fashion stores across the country, mainly focusing on Hanoi and Ho Chi Minh City.