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Central Vietnam steel plant to be auctioned for miniscule fraction of investment

By Duc Hung   April 7, 2019 | 07:56 pm PT
Central Vietnam steel plant to be auctioned for miniscule fraction of investment
The Van Loi Steel Mill in the central Ha Tinh Province has been left deserted for eight years. Photo by VnExpress/Duc Hung
The Van Loi Steel Mill, deserted for eight years, will be auctioned at 6.4 percent of its registered investment.

The plant in Ha Tinh Province is scheduled to be auctioned with a starting bid of around VND109 billion ($4.7 million), local authorities said recently.

The project, spanning an area of 26 hectares (64.2 acres), was licensed to operate in June 2007 with a registered capital of VND1.7 trillion ($73.3 million).

Its investors, Ha Tinh Steel Jsc and a few other companies and individuals, had set a target to produce its first steel billet in August 2010.

However, project construction failed to meet deadlines in the 2007-2010 period because investors lacked funds. They later borrowed over VND700 billion ($30.2 million) from three banks to carry on the project. With no substantial progress seen even after the loan, the provincial administration decided to revoke the project license in May 2015.

Since 2010, the unfinished plant has been left deserted, and the machinery and equipment rusted.

A third party evaluated the plant’s assets (not including land), which belong to the three banks at VND109 billion ($4.7 million). The banks will divide the proceeds of the auction.

After the auction, the project’s land will be returned to Ha Tinh Province and be allotted to new investors who are interested in using it.

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