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Major debt restructure to keep floundering Vinashin afloat

Update: October, 12/2013 - 09:08
An employee of Vinashin's Ha Long Shipbuilding Company works on a 53,000 tonne ship in the northern province of Quang Ninh. — VNA/VNS photo Huy Hung
HA NOI (VNS)— The Vietnam Debts and Asset Trading Corporation (DATC) and consultants have signed to issue global depository receipts (GDRs) guaranteed by the Vietnamese Government to restructure the Viet Nam Ship Building Group (Vinashin)'s US$600 million in debts.

Earlier, Vinashin got approval from a majority of its oversea creditors to transfer $600 million in loans including interest to $623 million worth of bonds, issued by the DATC for 12-years and an annual interest rate of 1 per cent.

These government-guaranteed bonds, issued under the form of GDRs, will be listed on the Singapore stock exchange, Nguyen Ngoc Su, Vinashin's chairman told local press on Thursday night.

"The loans have been settled and it will boost the restructuring of other loans, quicken the reform process of the group and create momentum for Vinashin's development in the future," Su said on Thursday.

In 2007, Vinashin issued $600 million worth of international bonds with 8-year terms for its investment projects.

However, Vinashin's financial malpractice was discovered after Government inspectors conducted an investigation into its business operations between July-November 2010.

At the end of 2009, the group was more than VND86.7 trillion ($4.1 billion) in debt.

In 2010, Prime Minister Nguyen Tan Dung approved a three year restructuring plan (2011-13).

After the state-owned group defaulted on loans for three years, US hedge fund Elliott Advisors LP and the UK's Bluecrest Mercatile sued the Vietnamese shipbuilder in the UK High Court in 2011.

In a meeting with Vinashin's debt owners in Singapore in August, Vinashin reached credit restructuring agreements with 64.7 per cent of its debt owners, who hold 79.3 per cent of the total debt.

In September, the UK High Court accepted Vinashin's restructuring plan with approval from a majority percentage from creditors.

The group has restructured 43 of its 216 member companies so far, withdrawing capital from 14 companies, closing 14, transferring capital to 12 companies and giving its property rights to three enterprises. — VNS

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