Vietinbank sell Cong Thanh's huge debts to VAMC

Cong Thanh is dragged down in huge debts

The prolonged financial imbalances and huge losses have caused Cong Thanh unable to pay its debts. Therefore, Vietinbank on last December 18 sold all its VND7.79 trillion ($338.7 million) debt at the bank to VAMC. Thus, VAMC will now have to recover the principal and interest from Cong Thanh's VND951 billion ($41.3 million) short-term and VND6.839 trillion ($297.3 million) long-term debts.

Accordingly, the long-term debt includes VND4.559 trillion ($198.2 million) in loans and VND2.28 trillion ($99.1 million) in bonds.

According to the report of Cong Thanh and VAMC released on March 28, the asset management firm required Cong Thanh to repay its debts in accordance with Document No.110/2019/CCT outlining specific timeline of payments on February 14.

The deadline to repay the long-term debts has been extended to 2035, setting the cement firm the task to repay the principal in 2017-2035 and interest in 2022-2027. In addition, regarding unscheduled interest, the time to pay is in 2022-2035.

Regarding its debt in bonds, Cong Thanh has to pay VND50 billion ($2.17 million) in 2018, VND150 billion ($6.5 million) in 2019, VND200 billion ($8.7 million) in 2020, and the rest in 2021-2035.

According to Cong Thanh's latest financial report, the firm in 2018 kept suffering losses andwas unsure whether it could keep running the business. Specifically, its revenue was VND3.372 trillion ($146.6 million), up 9 per cent on-year. However, the burden of VND788 billion ($34.26 million) in interest loans made the firm suffer VND615 billion ($26.74 million) of losses. In 2017, the firm recorded VND1.038 trillion ($45.1 million) in losses.

With the loss of $26.74 million in 2018, Cong Thanh’s accumulated losses reached VND2.287 trillion ($99.43 million), far exceeding its charter capital of VND900 billion ($39.1 million).