Bloomberg News

Local Bank Willing to Buy Vinashin Dollar Loan, Kinh Te Says

November 17, 2011

Nov. 17 (Bloomberg) -- A domestic bank is willing to buy back the debt of Vietnam Shipbuilding Industry Group at 35 percent of its face value, or $210 million, compared with the original $600 million, and will pay immediately, Thoi Bao Kinh Te Saigon online newspaper reported today, citing the chairman of the unidentified bank.

The offer came as Vinashin, as the state-owned shipbuilder is known, gave foreign creditors two options -- either accept 35 percent of monies owed now, or agree to new repayment terms and conditions of the loan in the future, the newspaper said, without saying where it got the information.

Vietnam’s government has spent the last year wrestling with the near-bankruptcy of Vinashin, whose default on foreign- currency borrowings at the end of 2010 raised doubts about asset quality at the country’s banks, according to Moody’s Investors Service.

Creditors meanwhile have suggested the shipbuilder get new loan terms including a 15-year maturity and interest equal to the London interbank offered rate plus 150 basis points, the newspaper said. The interest would increase by another 50 basis points from the 11th year through to the 15th year, according to the report.

--Diep Ngoc Pham. Editors: Katrina Nicholas, K. Oanh Ha

To contact Bloomberg News staff for this story: Diep Ngoc Pham in Hanoi at dpham5@bloomberg.net

To contact the editor responsible for this story: K. Oanh Ha at oha3@bloomberg.net


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