The Debt and Asset Trading Corporation
(DATC), under the Ministry of Finance, has considered providing a maximum sum
of VND250 billion ($12 million) to handle the debt of beleaguered seafood
company Bianfishco, its CEO Pham Quang Thanh told Tuoi Tre.
Thanh
said the debt-ridden company is expected to return to operations next month,
functioning as an outsource manufacturer for other seafood exporters to maintain
work and income for its 3,000 workforce.
There
are two solutions for Bianfishco to restart, added Thanh.
The
first option is to sell Bianfishco, he said, adding that many investors from
Japan and the US are showing interest in the company for its modern technology
and high economic potential.
“DATC
will act as an intermediary if there is any deal,” he said.
In the
second plan, DATC will consult, intermediate, and propose solutions for
Bianfishco and its creditors, most of which are the credit institutions, to
negotiate for the debtor to restart operation.
If any
creditor wants to sell the debt Bianfishco owes them, DATC will buy it, he
said.
“[Bianfishco’s]
total debt is around VND1.5 trillion ($72 million), with VND1 trillion indebted
to the banks, while the company’s total assets are VND2 trillion.”
It’s
the banks that count
However,
Thanh cautioned that the second solution may be hindered if the creditors are
not willing to cooperate.
Banks
hold the key decision on whether or not Bianfishco can restructure its debts,
he explained.
From
the case of Bianfishco, Thanh also complained that most banks have only focused
on evaluating their borrowers’ collateral assets, rather than the effectiveness
of the projects subject to the loan application.
In the
case of Bianfishco, the banks offered loans without an adequate inspection into
what the company would do with the money, as it later turned out that the
seafood company had managed to borrow VND20 billion ($960,000) only to buy a
luxury car.
“Worse,
when the borrowers face troubles, banks only focus on collecting debts, rather
than sharing the difficulties with them,” he added.
As for
the plan to restructure Bianfishco, Thanh said its shareholders should be
restructured first.
Bianfishco
should invite shareholders that are experienced in the seafood sector and have
true management ability to take its helm.
“Some
local seafood businesses have also planned to join Bianfishco via the investment
funds,” he said.
“An
international investor has also bid $120 million to buy the whole company.”
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