VietNamNet Bridge – The debt of $600 million, together with interest of the Vietnam Shipbuilding Industry Group (Vinashin) has been agreed by over 51% of the creditors to convert into new bonds, with a term of 12 years.
Vinashin Chairman – Mr. Nguyen Ngoc Su – says that Vinashin received the approval of a majority of the bondholders on the debt swap plan that had been introduced before. These creditors currently hold more than 75% of the total debts of Vinashin.
Accordingly, the $600 million loan, together with interest, will be converted into $623 million of bonds, with a term of 12 years and it will be guaranteed by the Ministry of Finance. The KPMG audit firm will be responsible to advise Vinashin on the plan.
With the above rate of agreement, Su says that Vinashin is eligible – under the laws of England – to ask the remaining creditors to approve the conversion. This group has been conducting a number of procedures before officially announcing the plan.
However, according to IRF Asia, this process can take up to six months because it may be delayed by a number of creditors who do not approve the plan. The bondholders are also extended the time to change their decision until March 20.
In 2007, Vinashin issued $600 million of international bonds with a term of eight years. According to the original agreement, the group will have to pay the first amount of $60 million at the end of 2010. However, at that time, Vinashin declared no financial ability to repay the loan.
According to Vinashin’s restructuring plan, the group will swap loans with bonds that have nominal income of 0%, 12-year term. The bond holders will enjoy interest rate of 1% a year, one-time payment with the original loan and $22 million of unpaid interest money, when the bonds reach maturity.
The latest debt settlement plan was sent to the creditors by Vinashin earlier this year, with the response deadline of February 15. The deadline was then extended to March 1.