HA NOI — Coffee processor Thai Hoa Group (THV) denied that it was facing bankruptcy and signed distribution contracts with two Chinese partners on Tuesday.
"Our company has been actively working with banks to restructure our capital," THV chairman Nguyen Van An told the online newspaper Thi truong Viet Nam (Viet Nam Market).
Our co-operation with the Chinese counterparts was not merely a move to soothe investor concerns, An added.
"They are long-standing partners and willing to help when we face difficulties," he said. "But we have to overcome them on our own."
Under the contracts, THV would import 5,000 tonnes of Arabica coffee from the Chinese companies and export 1,000 tonnes of instant coffee and 10,000 tonnes of Robusta coffee to them.
Meanwhile, Agribank, Maritime Bank and the Viet Nam Development Bank have already supported the company's capital restructuring. Current debts worth VND198 billion (US$9.4 million) owed to Vietcombank would be serviced through the Debt and Asset Trading Corporation.
An hoped his company could resume normal operations by September.
THV earlier restructured its assets by selling 99 per cent of a project in northern Dien Bien Province and 51 per cent of a project in Laos to Maritime Bank. The company maintains facilities in Lam Dong, Quang Tri, Son La and Dak Lak provinces with a total capacity of 300,000 tonnes of processed coffee per year.
Haphazard investment in dozens of projects around the country failed to generate cash flows and put THV under huge financial pressure. Last year, it posted a record loss of VND280 billion ($13 million), and outstanding short-term debt reached VND1.8 trillion ($85.7 million), against a charter capital of just VND378 billion ($18 million). — VNS