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Shipbuilder plans to sell $400 million worth of bonds overseas
Vietnam Shipbuilding Industry Group, the state-owned company known as Vinashin, plans to sell the country’s first foreign corporate bonds to raise funds for new vessels.
Vinashin plans to sell as much as US$400 million in US dollar-denominated bonds this year and has asked the government to guarantee the sale, Chief Business Officer Nguyen Quoc Anh said in an interview in Hanoi.
“We expect to hear from the government shortly so that we could be ready for the sale by July,” he said. “The precise timing will depend on how quickly international markets improve.”
Demand for maritime transportation is rising in Vietnam at a time when a slump in spending by the US and European consumers has crimped Asian exports.
The global credit crunch and recession means ship owners will struggle to raise funds for as much as 18 months, HSH Nordbank AG, the world’s biggest shipbuilding financier, said Wednesday.
Vinashin has started discussions with rating companies, including Standard & Poor’s, to prepare for the debt sale, Anh said.
“Given the deepening global financial crisis, it will be very difficult for Vinashin to sell the debt unless it offers very competitive terms,” Le Duc Tho, head of the investment department at the Hanoi-based Vietnam Bank for Industry and Trade, the country’s fourth-biggest bank, said. “This bond sale will hardly succeed without a government guarantee.”
Rising domestic demand for sea transportation means Vinashin needs as much as $4 billion to build new ships, Anh said.
“The government has agreed to inject more money to at least double Vinashin’s registered capital to VND14 trillion ($801 million) this year,” he said.
Eighty percent of the output from the nation’s first oil refinery in Dung Quat will be transported by sea, according to Vietnam Oil & Gas Group, the plant’s state-owned operator.
The refinery began operations on February 22 with an annual capacity of 6.5 million tons of crude.
Bloomberg
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