Vinalines clears debts with share swap

The State Bank of Vietnam has agreed to transfer some of the debt owed to Vietinbank by the Vietnam National Shipping Lines (Vinalines) into shares of member ports.
The State Bank of Vietnam has agreed to transfer some of the debt owedto Vietinbank by the Vietnam National Shipping Lines (Vinalines) intoshares of member ports.

The scheme, affecting 5 trillion VND(234.7 million USD) in debt, will go into effect when the port managersare equitised and will first be applied to Hai Phong Port and Da NangPort, making Vietinbank the ports' major shareholder for next year'sissuance.

According to a document sent to the Prime Minister, thecentral bank said this measure would not only help Vinalines reduce itsdebt burden but would also improve the non-performing loans situationof the bank.

However, the State Bank was concerned about the lackof legislation for transforming debts into shares, particularly whenHai Phong Port and Da Nang Port are not Vietinbank's clients.

Theresponsibility for building a legal framework for this operation lieswith the Ministry of Finance, which needs to quickly implement thescheme aimed at addressing bad debts.

Since the beginning of2014, Vietinbank has expressed its will to acquire the shares ofVinalines' members, which would be a positive development for thestate-owned giant, allowing it to handle a large volume of debts whileselecting a strategic partner following the unsuccessful launch of theports' initial public offerings.

Vietinbank reportedly asked to be excused from the standard requirements for becoming a strategic shareholder.

As of the end of last year, Vinalines owed some 48 trillion VND (2.25 billion USD) to the banks.

Vinalinesraised more than 315 billion VND (14.8 million USD) from selling morethan 20 million shares of Maritime Bank (MSB) during an auction earlythis week, according to Hanoi Stock Exchange.

The shares, with aface value of 10,000 VND (47 US cent), were sold to two investors at anaverage price of 15,654 VND per share.

Vinalines' disinvestment from Maritime Bank constitutes phase two of its restructuring plan.

Asof December 31, 2011, Vinalines had poured a total of 314.8 billion VNDinto Maritime Bank. The bank had a charter capital of 8 trillion VND.In the first half of this year, the bank posted profits of nearly 80billion VND.

VNPT, which has a holding of 8.95 percent inMaritime Bank, also intends to withdraw capital from the bank inaccordance with its restructuring plan.-VNA

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