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The revival of the long-cherished dream came in the context of its automobile assembly factory in Me Linh district in Hanoi, facing the risk of becoming a scrap yard after suspending operations for numerous years.
According to newswire NDH.vn, Bui Ngoc Huyen, general director of Vinaxuki, has submitted a document to the prime minister (PM) to request help to save the factory.
Accordingly, Huyen proposed the PM to approve Vinaxuki’s investment capital restructuring plan and allow the factory to borrow VND200 billion ($9 million) to maintain operations and pay salary for its employees.
In addition, Huyen requested the PM to establish a working group to clarify the reasons why the government refused to supply sufficient incentives for Huyen’s factory as well as why banks had declined to continue to supply working capital loans.
The construction of the 12-hectare factory was kicked off in early 2004 with the total investment capital of VND1.65 trillion ($74.3 million). The factory started operation in August 2005 with an output capacity of 20,000 units per year.
During the 2006-2011 period, the factory operated with profit and manufactured 20 truck and three car models at the localisation rates of 27 and 5 per cent, respectively.
However, in 2012, Vinaxuki had to shoulder a loss for the first time and was unable to repay VND45 billion ($2.03 million) to banks. In early 2013, Vinaxuki’s factory and its facilities in the central province of Thanh Hoa and the Central Highlands province of Dac Nong were forced to suspend operations due to financial problems.
By the end of 2014, Vinaxuki owed large banks, including BIDV and Vietcombank, a total of VND1.6 trillion ($73.4 million). The factory and its assets, such as machinery and land-use rights, had been mortgaged to take up loans from other banks.
Currently, there are only a handful of employees at Me Linh-based factory, most of who work as security guards.
In July 2015, Vinaxuki planned to sell its factory to repay its creditors after receiving debt notices from various banks and financial organisations, and found the factory's assets to have been stolen.
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