Fri. Feb 3rd, 2023

VietNamNet Bridge – Ship owners have put their old ships on sale to get money
to stop loss. However, it’s very difficult to find buyers at this moment, when
even ship demolishing companies also refuse with a shake of the head.

Seven ships to be sold to pay crews 


Vietnam, ship owners, Vinashin, laws, environment

Dai, the representative of Dai Huy, a well-known ship demolishing company in the
sea city of Hai Phong, said every day he receives no less than 10 calls from
commercial banks and finance companies which offer to sell old ships to him.
However, Dai said he had to refuse the deals.

The old ships are the borrowers’ assets mortgaged at the banks and finance
companies for the loans. Since the borrowers cannot pay debts, their ships have
been distrained by the lenders.

According to Dai, the lenders have been trying to bargain the old ships away,
offering to sell ships at the prices for scrap iron. However, Dai keeps
indifferent to the offers, because if noting that he has to pay 17-18 percent
per annum in bank loan interest rate, he would not make profit with the deals.

Besides, he would have to pay fine, if competent agencies discover that the old
ship demolishing would cause the environment pollution.

Therefore, Dai said he has stopped buying old ships for demolishing over the
last few months, no matter the ships flying the Vietnamese or foreign flags.

Dynamic Bright ship of ALC II finance leasing company was seen on the way to the
Dinh Vu ferry landing, with no sailor. Dynamic Bright is a dry cargo ship with
the tonnage of 5,300 tons, which was built in 2007 in Vietnam.

After one year of lying idle, Dynamic Bright now looks like an old man, covered
with corrosion and moss. The ship once belonged to a HCM City-based company.
However, since it could not pay debts to ALC II, the ship has been put on sale
to get money back.

Sources said that ALC II now offers to sell the old ship at VND16 billion, not
including tax. The price is “reasonable”, if noting that it is a young ship
(5-year old). However, despite the offered attractive price, ALC II still cannot
find the buyers.

“The price level is equal to VND10,000 per kilo of iron, which is just VND1,000
per kilo higher than the scrap iron price. If counting all the demolishing
expenses, the loss for demolisher is foreseeable,” Dai said.

The situation is even worse for Phu Hung 03. The ship owner many times called
for auctions, but no buyer has been found. Only several investors attended the
auctions, which set too low prices.

In late 2012, the information that Vietship bought AMC 03 ship (64,794 tons,
built in 1986) at VND68 billion only, stirred up the public. The price was
described as “very reasonable.” However, AMC 03 has been lying ashore since
then, and it’s unclear when it can go out to the open sea. Meanwhile, the new
ship owner has to pay VND100 million every day for the bank loan interests.
Especially, since AMC 03 flies with Mongolian flag, it cannot be demolished in

Nguyen Van Dang, a senior executive of Vinashin, said demolishing ships is the
final thing in the life circle of a ship. However, he complained that since
there has been no legal framework on this, demolishing ships in Vietnam is
considered illegal.

Heaving realized the problems of ship owners, the Ministry of Transport has
asked competent agencies to amend the current regulations to pave the way for
the ship demolishing. And while waiting for the regulations to be amended, ship
owners have been put on tenterhooks, because they have to pay big money just to
keep the scrap iron.


By vivian