Vietnam state firm begs government for $300 mln in debt relief

September 16, 2016 | 12:01 am PT
Vietnam state firm begs government for $300 mln in debt relief
Ninh Binh Fertilizer Plant in northern Vietnam has stayed idle for months this year. Photo by Vietnam Plus
Drought and a falling fertilizer market have landed the company in hot water.

The state-owned Vietnam National Chemical Group (Vinachem) has asked the government to freeze more than US$300 million of debts at two loss-making fertilizer plants.

Vinachem said its fertilizer sales have been going down, both in local and overseas markets, and thus asked for a series of privileges at its two fertilizer plants in Ninh Binh and Ha Bac, near Hanoi.

The company said months of severe drought have killed 100,000 hectares (247,000 acres) of rice fields in the Mekong Delta, adversely affecting its fertilizer business.

It asked for a VND2.7 trillion ($121 million) loan the Ninh Binh plant took out from the Vietnam Development Bank to be treated as state investment or be frozen for the next five years.

Operations at the plant have been idle for more than half of this year, while its losses by the end of June had reached VND2.7 trillion, well beyond its registered capital of VND2.5 trillion.

Vinachem also asked the government to freeze another Vietnam Development Bank loan of nearly VND4 trillion ($178 million) for a project to renovate the Ha Bac plant, which lost VND675 billion ($30.3 million) last year, and is projecting further losses of VND488 billion ($22 million) this year.

The company has asked the Prime Minister to instruct major banks like BIDV, Vietcombank and Vietinbank to continue lending money to the plants to keep them in operation.

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