Bad debt threat looms as doubtful debt to state-owned firms doubles

By Nguyen Ha October 21, 2019 | 05:40 pm PT

An employee counts money at a bank in Hanoi. Photo by VnExpress/Anh Tu.

Doubtful debt to Vietnam’s state-owned companies surged 2.3 times from 2017 to VND16.54 trillion ($712 million) last year, a government report says.

One of the largest doubtful debts was the VND10.08 trillion ($434 million) debt owed by a subsidiary to its parent company, the Vietnam National Chemical Group (Vinachem).

The subsidiary, Dam Ninh Binh, owed China Eximbank the money, but was unable to pay, and Vinachem had to pay on behalf.

Total debt to state-owned companies were VND1,450 trillion ($62.44 billion), accounting for 54 percent of their capital.

These companies also had total debts to pay of over VND374 trillion ($16.11 billion), which dropped by 9 percent from 2017.

The largest debt of VND114.8 trillion ($4.94 billion) belonged to oil and gas group PetroVietnam, equivalent to 30.6 percent of all domestic banks’ total loans.