Containers are loaded onto a vessel at the nothern Hải Phòng Port. The government has asked Vinalines to reduce its stake in this port to 20 per cent. -- Photo vinalines.com.vn

HÀ NỘI (VNS )— Việt Nam National Shipping Lines will make an initial public offering (IPO) in Q1 of 2016, said Vũ Anh Minh, director of the Ministry of Transport’s enterprise management department.

The State-run company, better known as Vinalines, built an equitisation plan last year, under which the State will retain a stake of 36 per cent.

Minh said that before the company becomes a joint stock firm, its debts will be reduced to VNĐ3.2 trillion (US$142.2 million). This value is expected to be further lowered to VNĐ1.8 trillion by the end of 2016.

Vinalines Chairman Lê Anh Sơn said the company’s debt is currently about VNĐ6.2 trillion, down 46 per cent from the VNĐ11.4 trillion recorded on December 31, 2013, before the restructuring began.

Vinalines faced an extremely tough time from 2010 to 2015, witnessing serious business declines in the face of economic turmoil. Its investment mistakes and mismanagement of funds even led to a debt value that more than quadrupled its charter capital in late 2010.

Prime Minister Nguyễn Tấn Dũng issued a decision in February 2013 adopting comprehensive reorganisation of the company to help it cope with the situation. The restructuring activities have focussed on marine transport, seaport exploitation and maritime services for the last three years. 

“We defined that debt settlement is not only a goal of the restructuring scheme, but also a matter that will determine the survival of our company,” Sơn said.

Deputy Minister of Transport Nguyễn Văn Công said the company has overcome hard times, but it must seek solutions to reach production and business targets, as the marine transport sector is expected to continue to face difficulties this year before a possible rally next year.

Vinalines Acting General Director Nguyễn Cảnh Tĩnh said last year was the first year the company saw profits during the restructuring period, and this was meaningful to a firm facing financial problems and an ailing marine transport market.

Sơn last month told Giao thông, a newspaper published by the transport ministry, that the company earned a profit of about VNĐ40 billion, with total revenue of more than VNĐ18.4 trillion in 2015.

Biz Hub reported last month that the company planned to obtain profit of at least VNĐ126 billion, with a revenue growing by 3 per cent year-on-year at VNĐ19 trillion in 2016.

Member enterprises

Vinalines officials said the company has completed equitising 12 member enterprises following the restructuring scheme. Its ports in Nghệ Tĩnh, Cần Thơ, Năm Căn, and Cam Ranh and Sài Gòn were privatised last year.

Cam Ranh’s shares started trading on the stock market last year, along with shares in Hải Phòng and Nha Trang, two previously privatised ports of Vinalines.

Sơn said that contrary to the marine transport situation in the country, port operations brought about the highest business results ever for Vinalines in 2015. Its ports obtained a combined profit of VNĐ800 billion, with Hải Phòng and Sài Gòn alone earning VNĐ600 billion last year.

He said that as the government has asked Vinalines to reduce its stakes in Hải Phòng and Sài Gòn ports to 20 per cent and continue to divest from smaller ports, Vinalines will have to change its business structure.

This means that the company must understand how to improve the marine transport business, keeping in mind that oceangoing freights have sharply declined and competition is getting stiffer following Việt Nam’s integration into the global economy.

“This is a very big issue that will fundamentally change the development strategies of Vinalines, and we must be prepared for that now,” Sơn said.

“I suppose that in the near future, the company will concentrate on building plans to develop a new fleet of vessels so that we can enhance our competition capacity while transportation service supplies exceed demand,” he said.

According to Sơn, as of the end of last year, Vinalines divested from 37 enterprises, dissolved seven businesses and let three companies fail. It gained more than VNĐ551 billion from these activities.

Vinalines will continue to divest from 15 other businesses this year, Minh from the transport ministry said without naming them. — VNS