Vinachem pays nearly US$264,433 of loan interest a day
By Minh An
September 22, 2017 | 06:22 AM GMT+7
The report of Vietnam National Chemical Group (Vinachem) shows that the total loans and finance lease liabilities of Vinachem as of June 2017 were more than VND19,000 billion (roughly US$837.37 million).
Vinachem's debt scale has not changed in recent years. To maintain the loans, Vinachem has paid VND1,057 billion (equivalent to US$46.58 million) of loan interest in the past six months, equaling VND5.8 billion (approximately US$264,433) a day. Last year, Vinanchem’s loan interest reached VND2,013 billion (roughly US$88.72 million).
About VND7,000 billion (roughly US$308 million) out of VND19,000 billion (roughly US$837.37 million) is utilized by Vinachem, the holding company. The remaining is allocated to the subsidiaries.
The projects/subsidiaries use large amount of loans including Ha Bac Nitrogenous Fertilizer And Chemicals Co., Ltd (VND7,938 billion, equivalent to US$349.8 million); DAP No. 2 - Vinachem Joint Stock Company (VND 3,349 billion, equivalent to US$147.6 million); Binh Dien Fertilizer Joint Stock Company (VND1,746 billion, equivalent to US$75.98 million); The Southern Rubber Industry Joint Stock Company (VND2,056 billion dong, equivalent to US$90.61 million); Ninh Binh Nitrogenous Fertilizer Ltd Co (VND1,177 billion, equivalent to US$51.87 million)...
Despite under high debt pressure, Vinachem believes that the risk concentration rate for debt repayment can be controlled. "Vinachem is capable of repaying due debts by business cash flow and proceeds from held-to-maturity financial assets", according to Vinachem report.
Vinachem’s report also states that the main creditors that offer loans to Vinachem and its subsidiaries are Vietnam Development Bank (VDB), Bank for Investment and Development of Vietnam (BIDV), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).
High loan interest rates have affected Vinachem’s profits remarkably. In the first half of this year, Vinachem’s consolidated profit was VND48 billion (roughly US$2.1 million), but in fact, the holding company suffered losses of VND192 billion (roughly US$8.46 million). The profits of uncontrolled shareholders in joint ventures were VND240 billion (approximately US$10.58 million).
Last year, the same situation took place when the uncontrolled shareholders earned the profits of VND441 billion (approximately US$19.43 million), the holding company suffered losses of VND1,336 billion (approximately US$58.89 million). In summary, Vinachcem had the consolidated losses of VND895 billion (approximately US$39.45 million).
Regarding the violations at Vinachem, the Secretariat has recently fired Nguyen Anh Dung from Vinachem’s Chairman.
Dung was irresponsible and inattentive in management and supervision resulting in violations and faults in management of personnel, capital, assets and land of the Group, which causes extremely serious consequences.
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