VietNamNet Bridge - By the end of June 2018, the total loans provided to 12 unprofitable enterprises under the management of the Ministry of Industry and Trade (MOIT) had reached VND20.934 trillion.

Of these, only two enterprises had begun making profit. Bad debts occurred with eight out of 12 projects and commercial banks had to restructure the debts, according to the MOIT report to the National Assembly.

In the first eight months of 2018, the DAP 1 fertilizer plant in Hai Phong City reported the profit of VND147.68 billion, and the Vietnam-China steel mill 527.24 billion. The other four operational plants still reported losses, but the loss was on the decrease.

The Ha Bac Fertilizer Plant, for example, took a loss of VND203 billion, which means the loss decrease of VND210 billion. Meanwhile, DAP 2 fertilizer plant in Lao Cai Province reported the loss of VND110.78 billion (VND324.98 billion), Ninh Binh Fertilizer VND701.85 billion and Dung Quat VND61.61 billion.

Of three projects, which had to suspend production, the Dinh Vu Polyester Plant resumed operation of three production lines. For the other two, relevant steps have been completed and they are ready to restart commercial operation when the market conditions are favorable. 

The two projects are the Quang Ngai and Binh Phuoc biofuel plants. 

There are three projects still under construction. The Phuong Nam Pulp Plant investor is following necessary steps to auction all assets and inventories. 

The Phu Tho biofuel plant is still meeting difficulties because PV Oil is not a major shareholder (it holds 39.76 percent of shares), while other shareholders, which do not operate in the oil and gas sector, holding 60 percent of shares, do not want to contribute more capital to continue the project.

It is still unclear about the fate of the third project, the second phase of the Thai Nguyen steel complex, because the dispute in the EPC contract with the Chinese contractor MCC and sub-contractors has not been settled.

MOIT affirmed that the settlement of the problems in the projects has been implemented in accordance with market rules and the state has not injected more capital into the projects.

As of June 30, the outstanding loans to the projects totalled VND20.943 trillion, while the medium- and long-term loans fell by VND124 billion compared with January 31, 2018.

In most cases, banks adjusted the debt payment deadlines, the amount of debts enterprises have to pay periodically, and the lending interest rates for short, medium and long term loans. 

The debts incurred by the Ha Bac fertilizer plant, DAP 1 Hai Phong, Vietnam-China steel mill and Thai Nguyen Steel are classified as first-group debts, while the debts of other projects are now ‘bad debts’.

US$1=VND22,000

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