VietNamNet Bridge – Lam Ngoc Khuan, Chairman of Phuong Nam Food Processing JSC, based in Soc Trang province, has gone abroad for “medical treatment”, leaving VND1.6 trillion ($80 million) of debts.

According to investigators, Phuong Nam’s chartered capital is only VND300 billion ($15 million) but it owes seven banks up to $80 million and the firm has lost the ability to pay debts.

The seven banks have sat together to find a restructuring plan for this firm. Specifically, the Soc Trang Agriculture and Rural Development Bank (Agribank) and LienVietPostBank Hau Giang have jointly worked out an optimal scheme in solving the debt problems and restructuring of this business.

They are the two biggest creditors of Phuong Nam, with over VND876 billion ($43.8 million).
The above loans are secured by land use right certificates and factories.
 
Soc Trang province authorities have called the seven banks for cooperating to implement a restructuring plan to help the firm resume production again.
 
Phuong Nam is a big seafood processing company in the Mekong Delta. It ranked in the Top 10 businesses of the Mekong Delta in 2011, with total export revenue of $74 million in 2011. Its major markets were mainly the U.S., Japan, Europe, South Korea, Hong Kong and the Middle East.
 
This company fell into the debt crisis and lost the inability to pay debts in 2012, with export revenue of only $7 million.  

Notably, one of the seven banks loaned Phuong Nam nearly VND550 billion (over $25 million) while the firm’s mortgaged assets are worth around VND50 billion ($2.5 million).
 
The police are investigating the case.

Quoc Huy