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Vinashin defaults but wants to meet creditors
Vietnam's state shipbuilder Vinashin has defaulted on a loan to a group of international lenders and informed them on Thursday it would make an interest payment only, sources with knowledge of the arrangement said.
The case has been watched closely by investors and analysts as a barometer of Hanoi's support for its state-owned enterprises ever since the government announced in July that Vinashin, or Vietnam Shipbuilding Industry Group, was nearly bankrupt under about $US4.4 billion of debt.
The first $US60 million payment on a $US600 million loan signed in 2007 by a consortium of creditors came due on Monday and a three-day technical grace period ended on Thursday.
"There's no doubt that they have defaulted," said one source, who declined to be identified.
That source and one other with knowledge of the situation said the shipbuilder had informed the lenders in a letter on Thursday that the interest had been remitted and would appear in bank accounts on Friday. One said the interest payment amounted to about $US6.8 million.
Vinashin also proposed a meeting in Hanoi with the creditors in the second week of January to discuss the procedure and timetable for re-payment of the loan, the sources said.
A senior Vinashin official declined to comment when contacted by telephone, while Chairman Nguyen Ngoc Su and a spokesman could not be reached.
Even though Vinashin is one of a handful of state-owned conglomerates that the government has lavished with political and financial support over the years, state officials have said the company was on its own with its debts.
Hanoi's position in the crisis has forced analysts to re-assess the likelihood of bailouts for other state-owned firms and in turn the possible impact on many of the country's banks, which have lent heavily to the state sector.
Moody's downgraded Vietnam's sovereign credit rating last week and Standard & Poor's followed suit on Thursday. Both also cut ratings for Vietnamese banks and took a fresh look at state mining group Vinacomin.
Positive movement
Vietnam's credit default swaps widened to 18-month highs this week as Vinashin's default loomed. The cost of insuring Vietnam's sovereign debt stood at about 310/320 basis points on Thursday.
In the long run, the recalibration of expectations because of the Vinashin debacle was positive, said Kevin Grice, senior international economist at Capital Economics in London.
"It's a healthy development over the medium- to long-term in terms of improving governance and the management of these enterprises (and) that people potentially considering investing in these companies are well aware that it's not an automatic, quasi-government guarantee," he said.
On Thursday, Vinashin also told the creditors is would conduct a "comprehensive review" of operations and cash flow, the results of which would be shared with the lenders and form the basis of the discussion in January.
"I think there is some positive movement. The positive movement is now they have professional advisers beginning to take things professionally," one of the sources said.
Thursday's letter comes one day after Vietnam's ruling Communist Party elite wrapped up a secretive meeting to hash out a leadership reshuffle that will take place in January.
Political analysts say the Vinashin case has been a factor in the jockeying for power among leaders, and when the extent of the company's problems were made public some interpreted it as an attack on the Prime Minister Nguyen Tan Dung.
Reuters
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