VAMC to finally take shape

May 23, 2013 | 14:00

(0) user say

The Prime Minister has approved the long-awaited establishment of a Vietnam Asset Management Company, to become effective from July 9, to address Vietnam’s burning bad debt problem.

illustration photo

It (VAMC) will operate as a single-member limited liability company which is wholly owned by the state. The debt trading firm will be put under management and supervision of the State Bank.

VAMC is scheduled to start operations in the second quarter and its charter capital will be VND500 billion ($24.038 million), sourced from the central bank.

VAMC will issue special bonds to buy debts from banks. The bonds will be issued in Vietnam dong, with the terms of five years at maximum and the coupon rate of zero per cent. The lenders can use such bonds as collateral to borrow from the central bank.

Enterprises selling debts to VAMC will be able to take out new loans from banks.

By By Nguyen Trang

What the stars mean:

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