Money-bleeding Vinalines subsidiaries to be dissolved

Vinalines will divest and let the firms go bankrupt over the next two years, according to a restructuring scheme that has been approved by Deputy Prime Minister Vu Van Ninh.

After the restructuring is completed, Vinalines will have to concentrate on its core businesses, including shipping, port operations, and shipping services.

In order to concentrate on the task while at the same time resolving its financial difficulties, Vinalines will have to classify its member units, letting Vinashinlines and Vietnam Oil and Gas Transportation Co (Falcon) dissolve first.

They are the two weakest links of the chain thanks to their involvement in many scandals that have been recently reported.

Early last month police from the Ministry of Public Security detained Do Quoc Khanh, the former general director of Falcon, for abuse of position and power on duty. The police also arrested Bui Van Vien, ex-deputy general director of the company, and Pham Van Doan, director of Hop Thuy Co Ltd, for the same charge.

The three men were allegedly involved in a case in which Nguyen The Ngoc, 37, the former chief accountant of Falcon Shipping Company, the predecessor of the Vietnam Oil and Gas Transport Corporation, is being investigated for alleged embezzlement.

Vinalines will also dissolve two other units, its branch in Can Tho City and the Asian Maritime Human Resources Center Joint Venture (Vina-STC).

By the end of 2015, Vinalines will have to completely divest from 37 other businesses, and merge others so that they can be equitized later.

After this restructuring, Vinalines will only hold 100 percent stake in two businesses, and 50 - 75 percent stakes in 30 other businesses.

As of the end of last year, the parent company Vinalines had suffered VND2.4 trillion ($115 million) in losses, according to a meeting held to announce the firm’s financial status in Hanoi on January 29.

This was the first time data on losses was officially published by the firm.

In the 2007 – 2011 period the firm said it enjoyed a positive profit rate which amounted to VND62 billion. However, state watchdogs revealed that the firm had suffered a VND2.6 trillion loss by the end of 2011.

According to Vinalines general director Nguyen Canh Viet, to reduce losses in 2012, its subsidiaries sold 10 ships with a total tonnage of 325,000 DWT, bringing the Vinalines fleet to 143 units with about 3 million DWT.

In 2013, it targets VND20 trillion in revenue, down from the VND20.2 trillion of 2012. The 2012 revenue was a 14 percent drop from the previous year.