return icon Vietnamnet.vn

International bond issuances: who are the borrowers?

The Ministry of Finance does not make public the names of borrowers of the capital the government mobilizes through its international bond issuances, making it difficult to control repayment obligations of debtors.

VietNamNet Bridge – The Ministry of Finance (MOF) does not make public the names of borrowers of the capital the government mobilizes through its international bond issuances, making it difficult to control repayment obligations of debtors.

The government has released an official announcement about the issuance of $1 billion worth of international bonds that would help pay debts.

Though MOF has declined to give further details about the debts, observers know that payment of a $750 million debt the government borrowed from foreign sources through an international bond issuance in 2005 is due soon. The capital had been re-lent to Vinashin, the shipbuilder.

Vietnam will have to begin to repay the debt in 2016, while Vinashin, which has been renamed SBIC, is unable to repay debts due to big losses.

In 2013, when the government requested MOF to come forward and issue bonds for the Vinashin-incurred $600 million debt swap, it also asked the ministry to prepare a similar bond-issuance plan for the government’s $750 million debt swap.

An accumulation fund for debt repayment was established at the time of the rollover bond issuance for the $600 million debt, but sources said the accumulated money is modest.

It is unclear where the $1 billion capital raised from the bond issuance in 2010 has been used.

According to a government resolution, the 2010 bond issuance aimed to mobilize capital for the Vietnam National Oil and Gas Group (PetroVietnam), the Vietnam National Shipping Lines (Vinalines), the Song Da Corporation and Lilama to fund their projects, including the Dung Quat Oil Refinery, ship procurement, Xekaman 3 and Hua Na hydropower plant development.

However, there has been no further detail about the borrowers, project implementation or capital recovery.

Meanwhile, Vinalines has said that it had not borrowed capital from the source, and Vinalines’ restructuring plan submitted to the government did not mention the borrowed capital.

Economists have expressed concern about the lack of information about the enterprises which borrowed money from government-issued international bonds, saying that it makes it difficult to control the use of the capital as well as the payment capability.

Meanwhile, all the sources of income for repayment must be put into the accumulation fund for debt repayment from which money will be paid back to bondholders.

The Prime Minister’s Decision No 192 stipulates that non-state finance funds, including the accumulation fund for foreign debt repayment, must follow the financial exposure principle for strengthened supervision by the state and people.

However, the fund’s receipts and expenses have never been made public.

The 2013 State Audit report also cited problems in the management of foreign debts which have been re-lent to domestic XXxx missing  ,which serve the assessment of the debt payment obligations.

TBKTSG

MORE NEWS

Authority maintains tough stance on safety violations on Hanoi’s “railway café street”

The Vietnam Railway Authority has insisted that it will take a hard line on railway traffic safety violations along Hanoi’s popular "railway café street" sketching across the inner districts in its recent report to the Ministry of Transport.

Foreign hi-tech firms expand investment in Vietnamese market

Molex, the world’s leading supplier of connectors and interconnect components, has unveiled its ambitions to expand its existing manufacturing plant in the Vietnamese market by developing its plant in Hanoi.

VIETNAM BUSINESS NEWS OCTOBER 4

Hai Phong lures more than 1.24 billion USD in first nine months

Vietnam rakes in US$16.05 billion from tourism in nine months

Vietnam earned some 394.2 trillion VND (16.05 billion USD) from tourism in the first nine months of this year, equivalent to 78% of the figure recorded in 2019 before the COVID-19 pandemic broke out.

VIETNAM NEWS HEADLINES OCTOBER 4

Vietnam invests in 10 energy technologies

Vietnamese poetry collection published in Canada

A poetry collection from five female translators based in Hanoi, entitled Ngũ Sắc Ánh Sáng (5 Sights of Light), has been introduced to Canadian readers by Ukiyoto Publishing.

Multi-billion thermal power project needs more capital

The Ministry of Industry and Trade (MOIT) has asked for ministries' opinions on solutions to problems related to the balance sheet of the Vung Ang 1 thermal-power plant.

The best September photos on VietNamNet

Hot air balloons with the Vietnamese national flag of 1,800m2 on the banks of the Saigon River, Typhoon Noru making landfall in Quang Nam Province, the roofs of many houses being blown away...

BSR to expand Dung Quat Oil Refinery

The Ministry of Industry and Trade (MOIT) has asked Binh Son Refining and Petrochemical JSC (BSR) to clarify some issues related to its project on expanding Dung Quat Oil Refinery.

Dutch conductor to lead concert at Opera House

Conductor Leon Bosch from the Netherlands will lead a concert featuring masterpieces by European composers at the HCM City Opera House on Saturday, October 8.

‘578’ to represent Vietnam at Oscars

An action film starring Miss Universe Vietnam 2018, H'hen Niê, 578: Phát Đạn Của Kẻ Điên (578: Magnum), has been selected as Vietnamese representative at the 95th Oscars, 2023.

USD surges to VND24,000, US$1.7 billion withdrawn from circulation

The State Bank of Vietnam (SBV) withdrew nearly VND41 trillion ($1.7 billion) through open market operations as the US dollar rose to over VND24,000 on September 26-30, 2022.

HCM City to build a series of new traffic projects

HCM City is speeding up procedures to start the construction of key traffic works at gateways by the end of the year, according to HCM City's Department of Transport.

Burning garbage in Hanoi threatens residents' health, property

There have been consecutive fires caused by people's poor awareness, who were burning garbage and straw in residential areas, causing fires recently in Hanoi.

New cargo airline still waiting for license

After the Prime Minister agrees on the establishment of IPP Air Cargo, the Ministry of Transport (MOT) will implement procedures to grant a license to the air carrier, according to MOT Deputy Minister Le Dinh Tho.
back_to_top