Firms register bad debts after foreign partners go under

By Dat Nguyen June 17, 2021 | 05:15 pm PT

An oil rig of PetroVietnam Drilling & Well Services Corporation. Photo courtesy of the company.

Several big companies are recording bad debts in their financial reports after failing to collect dues from foreign partners in difficulties, with some having gone bankrupt.

In its first quarter earnings report, the PetroVietnam Drilling & Well Services Corporation (PVD) recorded a loss of nearly VND104 billion ($4.5 million) against a profit in the same period last year.

Contributing to its loss was an unpaid amount of VND107.3 billion by KrisEnergy, a developer of oil wells in Cambodia.

PVD signed a deal to provide a mining rig for KrisEnergy in October last year, its first such project in Cambodia.

Other companies in similar struggles include textile firm May Song Hong, which saw its outstanding dues from American companies rise by 19.5 percent in the first quarter to VND654 billion ($24.2 million).

It has had to increase its provision for bad debt to over VND224 billion, especially after getting only 17 cents on the dollar from fashion firm New York & Company, whose parent firm filed for bankruptcy last July amid the Covid-19 pandemic.

The Thanh Cong Textile Garment Investment Trading has recorded outstandings of VND405 billion by March, a 43 percent increase since the beginning of the year. A quarter of this amount was owed by two subsidiaries of U.S. retailer Sears, which filed for bankruptcy in 2018.