Vinalines’ financial storm

It suffered a VND1,439 billion ($69.2 million) loss in 2012’s first half, double the loss sustained during the same period last year and accounted for 11 per cent of its charter capital. Vinalines director Nguyen Canh Viet said the company had faced a perfect storm of liquidity and jobs woes
The losses caused by two former Vinashin subsidiaries, Vinashin Lines and Bien Dong Shipping Company (BISCO), amounted to nearly half of the sum, or VND700 billion ($33.65 million).

Meanwhile, the figure was VND267 billion ($12.84 million) for Falcon Shipping Company (Falcon), said Vinalines. Also, its three associated companies in Cai Mep-Thi Vai area were saddled with debt, driving the firm further under water.

Vinalines also felt the heat due to its shipping fleet with the total capacity of 3.7 million dead weight tonnes (DWT) (by June 2012) financed by bank loans.

“With annual interest rates up to 21-22 per cent, paying interest on a loan of VND30-40 billion ($1.44-1.92 million) to buy a 20,000dwt-ship has bitten into all the ship’s revenue. Not to mention, leasing ships were faced with lower rents from its partners,” BISCO director Tran Thien said.

Its subsidiaries and associated companies’ withdrawing from non-core business with total VND370 billion ($17.79 million) was still a long way off, Vinalines said. Except from success in selling five ships with total loads of 182,000dwt, restructuring loans  has hit difficulties.

By the end of 2012, Vinalines has been capitalising Khuyen Luong Port, Vinalines Nha Trang and Vinalines Haiphong Maritime Services. The firm is also expected to accomplish the merger of Can Tho and Cai Cui ports, of Petrol Maritime Trade-Vinalines and Vinalines Petrol Company and change into a one member limited company.