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DATC’s priority task in 2009 is to facilitate equitisation
General Director of the Debt and Asset Trade Corporation (DATC), a super state-owned corporation, Pham Thanh Quang, said that the priority task of DATC in 2009 is to help push up the equitisation of state-owned enterprises.
Quang said that among the 1,700 state-owned enterprises marked for equitisation under the set plan, there are some 100 general corporations and economic groups, some of which have been facing financial problems. And it is DATC’s task to deal with the problems, so that the enterprises become eligible for equitisation. On average, DATC can assist 3-5 medium- and big-scale enterprises per month.
But with the limited capital of VND2,300bil, DATC cannot ‘rescue’ all enterprises, it has to focus on the enterprises with the biggest problems. Currently, DATC is dealing with the debts of member enterprises under construction and transport corporations. If everything goes smoothly, the bad debts of the 30 transport enterprises will be settled in mid 2009 to pave the way for the enterprises to become operational as joint-stock companies by the end of 2009.
Quang said that DATC has been dealing with the bad debts to help restructure 80 enterprises. It has successfully restructured 10 enterprises, while10 others have nearly completed debt restructuring. It is expected that the debt settlement of the 10 companies will be completed by the end of the first quarter of 2009, while the settlement of another 40 enterprises will be completed by the end of the second quarter.
DATC has also successfully settled debts for six sugar companies. The successful debt settlements of the companies once on the verge of bankruptcy showed that opportunities exist if people can see them. One year after the debt settlement and production and business restructuring, the six companies have been operating well with improved financial situations.
Son La Sugar Company, which once saw stockholder equity drop to minus VND151.5bil, has recovered one year since DATC purchased debts and initiated corporate restructuring. The company has gained the profit of VND17bil, creating jobs for 270 laburers and 4,000 sugar cane growers. Kon Tum Sugar Company, which was also on the verge of bankruptcy, has also recovered following its debt restructuring.
Quang believes that suitable policies are able to rescue even businesses on the verge of bankruptcy. However, it is necessary to issue package measures, including bank debt payment extensions, tax reductions and preferential interest rates, while DATC alone cannot do it all.
At the latest government meeting, the Prime Minister announced a 30% reduction of corporate income tax for small- and medium-size enterprises.
Quang said that to date, DATC has purchased VND5tril worth of debts, and it is going to purchase another VND5,000bil more.
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