Government unveils Vinashin restructuring plan

November 19, 2010 | 14:44

(0) user say

Vietnamese Prime Minister Nguyen Tan Dung yesterday signed a decision approving restructuring plan for troubled Vinashin group to restore it as a key player in the country’s shipbuilding industry.

Source: vinashin.com.vn

The purpose of the restructuring plan is to stabilise Vinashin, reduce losses, repay debts and create a momentum for development.

The government expects to stabilise Vinashin’s business operation within two years, from now to 2013, focusing on shipbuilding and ship repairing industry, supporting industry and training human resource for the shipbuilding industry.

Under the restructuring plan, Vinashin only has 15 subsidiary companies, down from 200 subsidiary companies and it is involved in three joint ventures.

Dung asked relevant ministries like ministries of Transport and Planning and Investment to tighten supervision of Vinashin.

Vinashin fell into financial trouble in 2008 and had to ask for the help from the Vietnamese government. In a document released in August this year, the Vietnamese government admitted management weakness was the main reason pushing the group to the brink of bankruptcy.

According to the government’s announcement, total debts of Vinashin at present are $4.5 billion while its total assets are $5.4 billion. The ratio of debt per equity is 11 that the government said “is seriously imbalanced”.

Over the past two years, clients of Vinashin canceled $8 billion in shipbuilding contracts and agreements signed with the group. The government also said international clients could cancel shipbuilding contracts worth $700 million this year.

The Ministry of Finance and State Bank are reviewing all the debts of Vinashin to help restructure these debts.

By Nhu Ngoc

vir.com.vn

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional