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Ministry may assume seafood processor's debts

Update: April, 20/2012 - 10:51

CAN THO — The Debt and Asset Trading Co (DATC) under the Ministry of Finance may buy up the debt of Binh An Seafood Joint Stock Co (Bianfishco) in order to help it finance new purchases of raw materials from fish breeders.

At a meeting held in the southern city of Can Tho on Wednesday with the participation of (DATC), Bianfishco, and representatives of 12 farmer creditors claiming past due debts for earlier supplies of tra fish, the DATC said it was considering buying Bianfishco's debts and paying off farmers in order to help the struggling seafood processor resume production.

DATC General Director Pham Thanh Quang said the DATC was currently reviewing Bianfishco's debts and might help retire them through one of three possible methods.

First, the DATC might directly pay the farmer creditors so that Bianfishco becomes DATC's debtor. Secondly, the DATC might make a loan to Bianfishco to help it pay off farmers. Or thirdly, the DATC might guarantee a loan to Bianfishco by a third party. Any of these methods would be implemented only with the approval of the Ministry of Finance, as well as of the creditors who would, in turn, forgive some penalty interest on the past-due amounts and drop any plans to file a lawsuit against Bianfishco.

Thai Ba Thi, representative for 10 fish-breeding households owed money by the company, urged the DATC to directly buy up the debts owed to farmers by Bianfishco.

Acting Bianfishco CEO Tran Van Tri noted that, in the past 50 days, Bianfishco had paid 30 farmers a total of VND64 billion (US$3.05 million) and that the company's debts still owed to farmers now totalled about VND200 billion ($9.5 million).

Tri is acting as CEO under a power of attorney from Bianfishco President and CEO Pham Thi Dieu Hien who is reportedly in California for medical reasons.

If the DATC were to help Bianfishco pay off its debts, Bianfishco would be able to resume production and return about 3,000 laid-off workers to their jobs, Tri said.

The company also needed an additional VND200 billion ($9.5 million) in working capital in order to ensure raw materials equivalent to about 300 tonnes per day for the seafood processing plant, he added.

A representative of the Can Tho People's Committee recently told the press that Bianfishco owed over VND1.5 trillion ($73.2 million) to banks, the social insurance fund, farmers and several companies. The company enjoyed strong operations from its establishment in 2007 until about the middle of last year when it began to face difficulties due to the refusal of banks to extend further financing. — VNS

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