VietNamNet Bridge - The government has allowed the Vietnam Shipping Lines Corporation (Vinalines) to use proceeds from the IPO (initial public offering) of its subsidiaries to restructure debt.

The decision came after a meeting chaired by Deputy Prime Minister Hoang Trung Hai on September 3. Thanks to this policy, Vinalines is likely to have more than VND2 trillion (over $95.2 million) to restructure its debt if the process to sell the shares of seaports goes smoothly this year.

At present, at least six subsidiaries of Vinalines have become joint stock companies, including the ports of Khuyen Luong, Quy Nhon, Hai Phong, Nha Trang, Da Nang and the Vinalines Nha Trang. Five others are scheduled to complete IPOs this year.

In a report to the Minister of Transport, Vinalines said that most of the VND291 billion (nearly $15 million) raised through the IPO of its subsidiaries was deducted by banks for bond debt. The corporation has asked for the government’s intervention.

Deputy Prime Minister Hoang Trung Hai has instructed the State Bank of Vietnam to deal with the case.

The income from the IPO of seaports was under Vinalines’ expectation when the four major ports of Hai Phong, Quang Ninh, Nha Trang, and Da Nang sold less than 5% of the scheduled shares, equivalent to one fifth of the plan.

The corporation said that investors were not interested in the IPOs because the State's rate is still too high – up to 75%.

Vinalines has proposed to continue divestment from the ports of Quang Ninh, Hai Phong, Nghe Tinh, Da Nang, and Cam Ranh to 51%. With this ratio, the corporation is expected to have more than VND2 trillion (over $95.2 million) for debt structure and for improving management efficiency at the seaports.

Photo: In a report to the National Assembly at the last session of 2013, Minister of Transport Dinh La Thang said Vinalines restructured VND7,855 billion of debt at the Vietnam Development Bank (VDB) and VND20,412 billion of debts at domestic financial institutions and increased its charter capital by VND900 billion.

In early August, the Ministry of Finance guided the VDB to allow debt structuring of Vinalines and its subsidiaries which were handed over from the Vietnam Shipbuilding Industry Group (Vinashin). Accordingly, nearly VND2.8 trillion of principal debt will be frozen in 2014 and 2015, and interest money of VND760 billion by 31/12/2013 would be absolved.

For more than VND9 trillion of debts at other credit institutions, Vinalines has asked them to sell its debt to the Debt and Asset Trading Corporation (DATC), freeze and rewrite debts or reduce and exempt interest money under the direction of the Government.

Deputy Prime Minister Hai has agreed in principle to this proposal and assigned the Finance Ministry to conduct an evaluation and assessment of it.

Na Son