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Vietnam Airlines plans to sell aircraft to cut losses

Vietnam Airlines plans to restructure its assets and investment portfolio, and issue new shares to increase its equity, including selling aircraft to decrease losses and negative equity.

The Hochiminh Stock Exchange (HOSE) has received a document from Vietnam Airlines (stock code: HVN), which outlines a roadmap for resolving the issue of HVN shares being put on the watch list.

According to the Vietnam News Agency and HOSE, Vietnam Airlines’ losses in 2020, 2021 and the first quarter of 2022, together with its negative equity as of March 31, led HOSE to issue a warning against HVN shares.

The national flag carrier incurred a net loss of VND2,570 billion during the second quarter, which sent the total loss in the first half rising to VND5,183 billion.

In the same period of the previous year, its respective losses totaled VND4,451 billion and VND8,458 billion.

The airline’s losses at the end of the second quarter were VND28,921 billion, way above its owner’s equity of VND22,144 billion.

According to the airline, the resumption of its international air routes has been slow amid global uncertainties, including the Russia-Ukraine military conflict, rising fuel prices, exchange rate risk and interest rate hikes.

Compared to the same period in 2021, the carrier’s losses have dropped thanks to the improvements of business operations and cash flows.

It said a restructuring plan for the 2021-2025 period would need approval at the general meeting of shareholders.

The carrier will restructure its assets and financial portfolio to improve revenues and cash flows, and sell or lease old airplanes.

It is also preparing to issue new shares to increase its equity. The share issue is expected to take place in 2023 and 2024.

Source: Saigon Times

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