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PetroVietnam Gas to borrow up to $700 million for LNG terminal
PetroVietnam Gas Corp. is in talks to raise up to $700 million in foreign loans for a $1 billion liquefied natural gas terminal in what would be the fifth overseas borrowing by a Vietnamese company since the near- collapse of the country’s largest shipbuilder in December.
Ho Chi Minh City-based PetroVietnam Gas, also known as PV Gas, plans to start construction of the LNG terminal by 2012, general director Do Khang Ninh said in a telephone interview from the city today. The company is in discussions with more than 10 suppliers, including Qatar Liquefied Gas Co., as it seeks to boost imports of the fuel and meet Vietnam’s rapidly rising demand for energy, he said.
PV Gas may face higher borrowing costs after the financial problems of Vietnam Shipbuilding Industry Group, or Vinashin, triggered a ratings downgrade of the country’s state-owned miner, Vietnam National Coal-Mineral Industries Group. Vinashin’s missed $60 million payment to international lenders in December proved that government support for banks and state companies isn’t guaranteed, Moody’s Investors Service said in April.
“It’s much more difficult to borrow than in the past,” Ninh said. “Now the government no longer guarantees loans, so that has posed a challenge for us.” Many banks are interested in the financing, he said, declining to elaborate.
Foreign Lenders
Vinashin, based in Hanoi, almost collapsed with debts of 86 trillion dong as of June 2010, the government said in August last year. The shipbuilder asked foreign lenders for a one-year extension after missing a $60 million principal payment on a $600 million syndicated loan, the company’s Chairman Nguyen Ngoc Su said in February.
Vietnam National Coal-Mineral Industries Group, or Vinacomin, had its long-term corporate credit rating cut to BB- from BB by Standard & Poor’s on Dec. 6 on the likelihood of low government support in the event of financial distress.
Four U.S. dollar-denominated loans have been signed in the Southeast Asian nation since January, according to data compiled by Bloomberg. State-owned Vietnam Oil & Gas Group, which counts PV Gas as a unit, borrowed $904 million in April from Bank of Tokyo-Mitsubishi UFJ Ltd., Credit Suisse Group AG (CSGN), HSBC Holdings Plc (HSBA) and Intesa Sanpaolo SpA to fund a thermal power plant, the data show.
National carrier Vietnam Airlines signed a $475 million facility in May with Citigroup Inc., DBS Group Holdings Ltd. (DBS) and HSBC, and will use the proceeds to buy planes, the data show.
Best Return
Dollar bonds in Vietnam are handing investors the best return in Asia this year, gaining 7.8 percent, HSBC indexes show. That compares with a 2.9 percent return for bonds in China, and returns of 7.6 percent and 6.9 percent for dollar debt in Indonesia and Thailand respectively.
PV Gas raised 1.89 trillion dong ($90.8 million) via the sale of a 3.2 percent stake in an initial public offering of shares in November. The company’s pretax profit will rise 17 percent to more than 7 trillion dong this year, Ninh said in a phone interview April 18.
PV Gas’s proposed terminal, to be built in the southern province of Binh Thuan, will be able to handle imports of up to 3 million tons of LNG per year, Ninh said today. The terminal is expected to be ready for first cargoes by 2015, he said.
bloomberg
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