Struggling Vietnam Airlines to receive $174 mln loan

By Anh Tu   June 21, 2021 | 06:00 am PT
Struggling Vietnam Airlines to receive $174 mln loan
A Vietnam Airlines aircraft lands at Tan Son Nhat International Airport in Ho Chi Minh City, June 15, 2020. Photo by VnExpress/Quynh Tran.
An interest-free loan of VND4 trillion ($173.9 million) will be soon disbursed a to national flag carrier Vietnam Airlines, which is on the brink of bankruptcy over Covid-19 impacts.

The legal procedures for an aid package designated for the local aviation sector have been completed, and the VND4 trillion loan, part of the package, is "scheduled to be disbursed to Vietnam Airlines late June or early July," Dang Anh Tuan, head of the carrier’s Communications Department, told VnExpress Monday.

Earlier, late last year, the National Assembly had approved an aid package of VND12 trillion for the troubled carrier.

At a press briefing held Monday by the State Bank of Vietnam, the country’s central bank, Nguyen Tuan Anh, head of the central bank’s Credit Department, said three local banks, SeABank, MSB and SHB, have pledged to offer Vietnam Airlines loans totaling VND4 trillion sourced from the central bank’s refinancing operations.

Vietnam Airlines’ overdue debts have surged to VND6.24 trillion. According to a report recently drafted by the Ministry of Planning and Investment, the carrier, which racked up losses of nearly VND5 trillion in the first quarter of 2021, is likely to make losses of VND10 trillion in the first half of this year.

As of March 31, Vietnam Airlines posted negative undistributed after-tax profits of more than VND14,218 billion, compared with its registered capital of VND14.19 trillion. If this problem is not solved, Vietnam Airlines shares coded HVN on the local stock market will be delisted.

On April 15, the Ho Chi Minh Stock Exchange put HVN shares on the warning list because the carrier was posting big losses.

At its extraordinary general meeting in late 2020, Vietnam Airlines said it would use VND8 trillion from its share issuance to pay all overdue debts, compensate for shortages of capital for production and business, and repay short-term and long-term loans from banks.

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