Only way out for long-delayed IP proposed by Hai Duong

Photo Duc Thanh

The Hai Duong Provincial People’s Committee just held a working session with related parties at Viet Hoa-Kenmark Industrial Park (IP) project and ultimately came to the conclusion that the IP must be sold in the upcoming time.

Hai Duong IP Management Authority was assigned by the provincial People’s Committee to devise an official way out and submit it to the provincial management for approval.

“The project has remained unsolved for quite a long time now, while the IP holds strategic importance in attracting investment to Hai Duong. This bottleneck must be tackled without further delay to unlock the so-far inhibited opportunities for others,” said a source from the provincial management.

Also according to the source, the IP was unsuccessfully put on sale several years ago, but there were no buyers and the $67.6 million debt of IP developer -Taiwanese furniture-maker Kenmark Group- towards Vietnamese banks still hangs in the balance.

“Before it was put on sale, the IP was highly valued by the developer, so buyers were not charmed. Now price fixing will be assigned to the creditors, promising a more reasonable pricing to lure buyers,” the source revealed.

Viet Hoa-Kenmark IP was licensed in 2005. At the time, the developer promised to inject $500 million into turning the empty land into a mammoth IP and an urban township.

During the first phase, Kenmark was set to disburse about $98 million and, in fact, spent $44 million on building internal roads, workshops, as well as a wastewater treatment and an electricity generation system.

The developer abruptly returned home in 2010, suspending the project without further notice.

Unsolved contradictions between Kenmark and two Malaysian investors, who not only contributed capital to building the IP but also ran projects there, were supposedly one of the main reasons for the project’s failure.

Kenmark’s suspended $67.6-million debt to Vietnamese banks was another headache with little solution on the horizon.

To open a path to dealing with the debt, Kenmark chairman Hwang Ding Kuo flew to Vietnam numerous times to work with relevant lenders and local management authorities.

They came to a consensus on selling the IP to recoup the investment capital and pay off bank debts. However, all negotiations with potential buyers failed due to transfer price-related issues.

At the moment, as the IP project’s price is now fixed by the lenders instead of the developer, the project promises to be more appealing to investors, paving the way for a happy ending to a long journey full of adversity.