VietNamNet Bridge – International experts have warned that the bad debts, worth
hundreds of trillions of dong would still be the big challenge for the Vietnam’s
national economy for at least several years.
Most businesses are big debtors
A report by the Steering Committee on Enterprise Renovation and Development of
the government office showed that the loss incurred by state owned economic
groups and general corporations in 2012 reached VND2,253 billion.
Ten economic groups and general corporations incurred the accumulative loss of
VND17,730 billion in total. The total accounts payable of the conglomerates have
reached VND1,330 trillion, of which the irrecoverable debt has reached hundreds
of trillions of dong.
The collapse of Vinashin, the shipbuilder, alone has dealt a strong blow on the
national economy. Experts have estimated that about VND100 trillion will be
needed to pay workers, insurance policies and pay debts.
Especially, Vinashin’s bad debts have shaken some commercial banks – the
creditors of Vinashin. Habubank is one of them. The bad debt ratio of the bank
was 16.06 percent, which included the VND3 trillion loan to Vinashin which is
believed to be unrecoverable. Habubank has to pay a heavy price for this, having
to merge into the Saigon-Hanoi Bank.
The Vietnam Waterway Construction Corporation (Vinawaco) has been added into the
Ministry of Finance’s list of businesses put under the special control for the
last many years. Vinawaco’s accumulative loss by 2012 had climbed to VND1
trillion, the ratio of debt on stockholder equity had reached 14.55, or five
times higher than the allowed level.
Restructuring proves to be the only way out for Vinawaco for now. However, this
would mean that the huge debts would be put on the state’s burden.
Vinalines’ General Director–Nguyen Canh Viet, said though the number of
subsidiaries was cut from 87 to 37, and the corporation sold 10 big ships, it
still incurred the loss of VND2,439 billion in 2012.
In the cement industry, the Thai Nguyen and Dong Banh Cement Plants, the two
subsidiaries of Coma have been cited as the biggest debtors. The latter has
stopped operation since March 2012 after incurring the loss of VND197 billion.
The Ministry of Finance had to pay $3.49 million dollars for Dong Banh, and
Euro4.25 million for Vinaicon.
Immeasurable consequences
The member of the board of directors of a joint stock bank has admitted that the
bad debts have made banks exhausted.
An analysis of Dr. Dinh Tuan Minh from the Hanoi National University showed that
the bad debts of state owned economic groups and general corporations amount to
30-35 percent of the total outstanding loans provided to state owned
enterprises. The outstanding loans of the 12 state owned economic groups alone
reached VND218,740 billion.
Meanwhile, the Ministry of Finance’s plan on restructuring state owned
enterprises showed that in 2012, PetroVietnam was the biggest debtor, who
borrowed VND72,300 billion. The second biggest debtor was EVN, VND62,800
billion, and the third Vinacomin VND19,600 billion.
The Vietnam Development Bank (VDB) has been found as the lender of most of the
bad debts incurred by state owned enterprises. The bank has been lending with
the capital raised from issuing stocks and disbursing ODA (official development
assistance) capital.
VDB also provided a preferential loan worth VND300 billion to Vinashin at the
interest rate of zero percent to help the shipbuilder pay workers. The
Electricity of Vietnam has borrowed more than VND5 trillion. The debts of state
owned conglomerates alone account for 75-80 percent of total outstanding loans
of VDB.
Tien Phong