Vinashin issues government guaranteed rollover bonds

>> Major debt restructure to keep floundering Vinashin
>> G-guaranteed bonds issued to help Vinashin

The October 10 trading session at the New York Stock Exchange which opened at 9 am local time, or 8 pm Hanoi time, officially confirmed that the $600 million international rollover bonds issued by Vinashin were under custody here before they are listed on the Singaporean market.

This is the final step to be taken after many days of negotiations on the restructuring of the $600 million debt incurred by the Vietnamese state owned group, which has fallen into insolvency.

The rollover bonds, with the interest rate of one percent per annum, will mature in 2025.

The bonds, as agreed by the involved parties, must be listed in Singapore, an international market.

However, since a lot of the investors are from the US, the bonds will also be put under the control of the US Securities Law so as to protect the investors’ benefits.

The bonds must be deposited at the New York Depository Center. From October 11, or after the custody was confirmed, the $600 million worth of bonds have been listed on the Singaporean bourse.

The decision by the government of Vietnam to guarantee Vinashin’s rollover bonds has caused a surprise to many people, because the move does not come in line with the statement by the Ministry of Planning and Investment (MPI) before.

With the move, the government has shown that it will help Vinashin tackle with the huge debts burdening the group and pushing it against the wall.

Meanwhile, in the past, MPI affirmed Vinashin would not get the support from the government to settle the debts. A leader of the ministry stated: “We made great efforts to help Vinashin operate effectively. And now it has to pay its debts itself.”

Vinashin, which failed to operate as an economic group, has become operational as a general corporation since July. The corporation, which now comprises of eight shipbuilders, plans to finish the debt resettlement by 2014.

Deputy Prime Minister Nguyen Xuan Phuc, when answering the inquiries from National Assembly’s Deputies in June 2013, affirmed that Vietnam should not “let Vinashin die.”

Phuc said it is necessary to restructure Vinashin to make it stronger instead of letting it go bankrupt. Vinashin is a state owned enterprise, and if it goes bankrupt, this would lead to immeasurable consequences. Especially, the State would lose capital, while thousands of workers would lose their jobs.

Nguyen Minh Phong, a well-known economist, also said he disagrees with the opinion that it’d be better to dissolve Vinashin and start up from the very beginning.

Phong said it would be a blunder to dissolve the biggest shipbuilding company now, while Vietnam strives to have 50 percent of GDP to be sourced from sea-borne economic branches.

A lot of decisions have been made to rescue Vinashin. The Ministry of Transport, the governing body of Vinashin, has decided to cut down the workforce, transfer Vinashin’s subsidiaries into the State Capital Investment Corporation (SCIC), the super-company specializing in making investment in enterprises with the state’s money, and DATC (the Debt and Asset Trading Corporation), an arm of the Ministry of Finance.

It has also allowed 100 Vinashin’s subsidiaries to “put off” the “Vinashin shirt” they have been wearing over the last many years.

All of the moves just aim to revive Vinashin.