DATC steps in behind business reshuffle

Non-performing loans at credit institutions are estimated at more than VND200 trillion or $9.5 billion, whereas DATC’s chartered capital just worth VND2.481 trillion ($118 million). How to tackle bad debts then?

DATC just reported VND2 trillion ($95 million) chartered capital at its debut, now the figure amounts to VND2.481 trillion which is small against our big task of purchasing debts to help firms reshuffle. In fact, we have engaged in restructuring over 100 companies. Before restructuring, a lot of firms were on the verge of going bust on the back of huge overdue debts which almost ate up their owner capital.

After restructuring, many firms have resumed operation and gradually generated profits, paving the way for debt repayment.

Most of firms getting DATC support are small in size. Correct?

We are now involving in shake-up plan of Binh An Seafood Joint Stock Company (Bianfishco), a big name in the seafood sector, in close cooperation with the Saigon-Hanoi Bank (SHB). During restructuring, DATC, SHB, Bianfishco, shareholders and creditors have worked closely in a constructive manner to seek suitable remedies. Consequently, Bianfishco’s production and business have gradually resumed pace. However, that is initial steps in the shake-up plan only.

Our target is to turn Bianfishco into a leading seafood business in Vietnam.

The case reflects that in tackling bad debts for business restructuring capital sources is important but should not be held of foremost importance. Suitable mechanism and policies are crucial parallel to cooperation from relevant stakeholders and the would-be-restructured businesses as well.

Besides Bianfishco, DATC shall deal with bad debts at a number of other firms. How will DATC handle the task given its modest chartered capital?

We have to speed up capital turnover. After purchasing debts and taking part in enterprises’ reshuffle plans we will divest at suitable time when restructured firms operate stably.

We are being assigned to restructure Vietnam Sericulture Corporation (Viseri). Under Viseri’s reshuffle plan recently rubber stamped by Minister of Agriculture and Rural Development, DATC will purchase over VND122 billion ($5.8 million) loss of Viseri. After restructuring when Viseri comes back on development path, DATC will host Viseri’s IPO to recoup capital.

We do expect Viseri’s inner problems would be tacked after two years of restructuring. Besides Viseri, we are mulling plans to re-organise many other big firms like Thai Hoa Group which is facing financial constraints with debts surpassing VND1 trillion ($47 million).

What support policies are needed to support DATC?

Banks and DATC alone are not enough to get business restructure process go smoothly. There would need to be a special mechanism to mobilise assorted economic sectors, including private equity investor to come on board.