Chair of the members’ board at Vietnam Shipbuilding Industry Corporation (Vinashin) Nguyen Ngoc Su confirmed that Vinashin is in very difficult situation, having no resource for repayment. However, after a year of restructuring, Vinashin would certainly arrange funds to pay the existing debts. This information was said in the interview with Vietnam News Agency regarding the rejection of foreign creditors represented by Credit Suisse on Vinashin’s moratorium proposal.
Talking about the lastest news that foreign banks have refused to postpone Vinashin’s first term payment on December 20, Su said in 2007, Vinashin issued $600 million bonds through Credit Suisse. Under the agreement, Vinashin must pay $60 million every six months for ten times.
On December 20, Vinashin would have to pay the first $60 million. However, Vinashin currently has no financial funds for repayment. Thefore, the corporation has sent written proposal to creditors, which are foreign banks, to postpone the repayment one year.
Su added that to this point, they have not received any documents saying that all creditors disagree with the proposal. By principle, the decision should be made through voting.
Nevertheless, the focal bank Credit Suisse said 100 percent vote has not yet been achieved from lenders.
Concerning how Vinashin would make this first repayment, Su said it takes time to restructure the group. At present, Vinashin is trying to negotiate with creditors to have flexible measures to handle this debt.
According to Vinashin’s proposal, the first repayment would be paid on December 2011, as after one year of restructuring, the group would be able to arrange different financial funds for repayment.
Specifically, among the 216 members to be reorganised, the group would negotiate with its partners to carry out transference. Vinashin expects to obtain about 23,000 billion dong if the transferences are successful. Furthermore, the group would promote production and business activities, focusing to complete and hand over the vessels, to soon be paid.
In addition, regarding some liability limited members, Vinashin would conduct equitisation and put into the market for sale.
Especially, Vinashin’s equipment and material inventory is having resources for building about 100 vessels worth dozens of trillions of dong. These resources have been in stock for the last two to three years, due to global economic crisis, many owners canceled their contracts for shipbuilding. These resources would be mobilised to build vessels or sell for capital recovery.
Regarding how the restructuring plan to reduce debts, restore and develop the group would be implemented, Su shared that along with promoting production and business activities, Vinashin is negotiating with vessel owners to extend the completion deadlines. To date, the group has handed over 27 ships. On December 25, 2010, another eight ships would be handed over, bringing the total completed ships to be 35 units within four months as committed to the government. To December 31, Vinashin would hand over six more units. As such, the group would over fulfil the target with six units. Vinashin expects to hand over 63 vessels worth about $700 million in the whole year.
Shortly after the prime minister approved Vinashin’s restructuring plan on December 7, the group held a conference on reorganisation plan for 216 member units. Steering Committee has been established, 216 units would be divided into five groups according to the charactistics of each unit. Group one includes units for transference and capital withdrawal. Units in group two would be sold to recover capital. Units in group three would be propsed to transfer to other corporations. Units in group four would be merged into other units of Vinashin. Group five includes units which would be dissolved.
Vinashin is currently negotiating with some investors, and some investors have registered to purchase and find information about those units. Some potential units are very easy to be sold.
However, after restructuring, the number of members would be decreased from 216 to 43, redundancy of work force would be about 13,000 persons, mainly located in the units that would be equitised, transferred, sold or dissolved. That is the very big concern of the group.
Vinashin is trying to minimise the number of people losing their jobs. The 13,000 redundant workers would be arranged accordingly to their ability and job aspiration.
Among the 13,000 people, Vinashin would review the level of professional skills, allocating skilled workers and engineers into some major shipyards. The new owners would arrange jobs for the remaining employes, in line with their capacity. Vinashin would coordinate with other businesses, the Federation of Labour, Department of Labour, Invalids and Social Affairs to allocate suitable jobs or arrange reasonable settlement for employees in the units which need to be closed.
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