VietNamNet Bridge - The State Bank of Vietnam (SBV) has decided to save Hoang Anh Gia Lai Group, which has incurred big debts and tumbling share prices. However, the Prime Minister will make the final decision.

 

 

SBV has sent a document to ask Prime Minister Nguyen Xuan Phuc’s opinion about the debt restructuring to be applied to Hoang Anh Gia Lai. 

The document, according to Thoi Bao Kinh Te Sai Gon, comprises two important points. First, the central bank plans not to change Hoang Anh Gia Lai’s debt classification for some important loans provided by 11 commercial banks, while loan interest rates would be restructured.

Second, SBV may consider refinancing commercial banks so as to support restructuring.

“This is just a plan on restructuring and rescheduling the debt payment, while it is too early to say about saving the enterprise,” a source said in the newspaper.

“More importantly, whether enterprises can be saved would still depend on their capability,” the source said. 

The State Bank of Vietnam has decided to save Hoang Anh Gia Lai Group, which has incurred big debts and tumbling share prices.

If the Prime Minister agrees on the method, creditors (commercial banks) and SBV will meet to discuss a detailed plan on debt restructuring and refinancing to be applied in different periods.

If the plan gets the Prime Minister’s go-ahead, Hoang Anh Gia Lai’s debts would be kept in the current group of debts (they will not be removed to other groups of debts and listed as worse debts) on bank balance sheets, while Hoang Anh Gia Lai will be allowed to extend the debt payment deadline. 

Under current regulations, debts belonging to the fifth group are considered the worst debts, which means irrecoverable debts.

Regarding the State Bank’s refinancing process, the refinancing interest rate would be 6-6.5 percent per annum, which would depend on the banks’ process of debt collection.

“The loans provided by commercial banks to Hoang Anh Gia Lai Group had an interest rates of 10-11 percent. As such, the 6 percent refinancing interest rate would be reasonable for banks,” a banking expert said.

Also according to Thoi Bao Kinh Te Sai Gon, the debt restructuring plan got stuck when creditors and the watchdog agency could not reach a common voice. 

A bank did not accept the plan, saying that Hoang Anh Gia Lai’s collateral at the bank was big enough to pay for debts, while there was no need to extend the debt payment deadline.

SBV agreeing to save Hoang Anh Gia Lai has helped the company’s shares bounce back. 

VnExpress reported that Hoang Anh Gia Lai and Hoang Anh Gia Lai Agriculture Company, a subsidiary, all saw share prices hitting the ceiling level on May 17.


Kim Chi