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|Vinawaco requested the prime minister to give them exemption from a $2.34 million debt|
Debt out of the blue
According to Vinawaco, in September 2016, it received a document from Vietcombank’s Ho Chi Minh City Branch, asking the corporation to pay VND53.1 billion ($2.34 million) after a loan Vinawaco took up in 1995 to buy three ships. The debt includes VND12.59 billion ($553,724) of the principal, VND27.2 billion ($1.19 million) of interest, and VND27.2 billion ($1.19 million) of fines for late payment.
Vietcombank’s letter was a great surprise to the members of its Board of Directors, especially Vinawaco’s strategic investor, because the debt was not mentioned in the evaluation of the firm’s value for equitisation. It needs to be said that Vinawaco officially started operating as an equitised firm on May 30, 2014.
According to Ngo Van Tuan, chairman of Vinawaco's Board of Directors, the debt impacted the firm’s credibility as well as its business and manufacturing plan. Besides, it will make it difficult for the firm to approach other credit institutions and apply for a guarantee to implement its signed contracts.
Tuan added that the debt is true, however, it was taken up before the firm conducted its equitisation, thus, the existing board of directors does not have an obligation to pay.
Paying the debt from state capital?
After Vinawaco was informed of the debt, in October 2016, the Ministry of Transport (MoT), which holds a 36.62 per cent stake in Vinawaco, submitted documents to propose the PM and the State Bank of Vietnam (SBV) to consider cancelling Vinawaco’s original VND12.59 billion ($553,724) debt, however, SBV refused.
According to the latest movements, MoT continued to petition the PM to provide and exemption for Vinawaco. In case MoT’s proposal is refused, the ministry will use part of its state-owned capital in the firm to pay the debt.
At present, Vinawaco’s charter capital is VND300 billion ($13.2 million), VND109.8 billion ($4.83 million) or 36.62 per cent stake of which is owned by the state. In case MoT uses this capital to pay off Vinawaco’s debt, the state will only hold 18 per cent of the firm. According to MoT, this is the optimal solution to deal with the 23-year debt.
Tuan stated that Vinawaco’s shareholders want MoT to deal with the firm’s financial problem before the firm transfers the right to represent the state-owned capital from MoT to State Capital Investment Corporation (SCIC).