Vietnam Airlines is expected to receive a credit package of VND4 trillion ($173.9 million) soon to help avoid bankruptcy.
|Huge credit package coming soon to save Vietnam Airlines |
"Procedures to provide a credit package of VND4 trillion ($173.9 million) to Vietnam Airlines are being carried out urgently. The airline will be able to access the funds at the end of June or in early July," Dang Anh Tuan, head of Vietnam Airlines' Communications Department said.
Last year, to overcome its financial issues due to the severe impact of the COVID-19 pandemic, Vietnam Airlines requested a bailout package of VND12 trillion ($521.74 million) from the government, including a loan of VND4 trillion and capital increase of VND8 trillion ($347.83 million).
In 2020, Vietnam Airlines reported VND11.18 trillion ($486.1 million) in net losses, the largest one ever for a fiscal year.
In the first half of this year, the corporation's losses were estimated at around VND10 trillion ($434.8 million) by a recent report of the Ministry of Planning and Investment. Overdue debts reached VND6.24 trillion ($271.3 million), pushing the airline into bankruptcy. If Vietnam Airlines does not receive the VND12 trillion bailout from the government, commercial banks will not disburse or extend credit to it, essentially sealing its fate.
Vietnam Airlines is currently hard-pressed to pay its overdue loans, especially short-term loans. In its consolidated financial statement for 2020, the airline reported long-term debts of VND9 trillion ($391.3 million) and short-term debts of VND6.8 trillion ($295.65 million).
The VND4 trillion bailout could assist Vietnam Airlines in overcoming its current fiscal challenges and improve the liquidity of the company while aviation continues to be hampered by the pandemic.
The annual general meeting of Vietnam Airlines' shareholders, which was delayed past June 30, is expected to reveal some information on the VND8 trillion capital increase plan.