Delayed Vinashin repayment would raise questions-Moody’s

HANOI, Nov 29 (BestGrowthStock) – A delay in debt repayment by
troubled Vietnamese state shipbuilder Vinashin will raise
questions about the government’s support of the firm and could
hurt state-owned commercial banks, Moody’s ratings agency said.

Vinashin, or the Vietnam Shipbuilding Industry Group, has
asked to postpone by a year a $60 million principal payment
due on Dec. 20 for a $600 million loan arranged by Credit
Suisse , the newspaper Tuoi Tre quoted Vinashin’s
chairman Nguyen Ngoc Su as telling a news conference on Nov.
19.

Sources at Credit Suisse told Thomson Reuters Basis Point
last week that no formal request had been received and
negotiations had not begun.

“Because the debt-ridden conglomerate is 100 percent state
owned, the market views its debt as backed by an implicit
government guarantee,” Moody’s said on Monday.

“However, a delay in Vinashin’s debt repayment will raise
questions about the extent of government support to Vinashin,
other SOEs, and Vietnamese banks.”

In July, the authorities announced that Vinashin teetered
on the brink of bankruptcy, having racked up more than 86
trillion dong ($4.4 billion) in debt, and would be
restructured.

For some state-owned commercial banks, Vinashin debt
represented their largest debt concentration and exposures
could be as high as 3 percent of individual loan portfolios,
Moody’s Weekly Credit Outlook said.

“Most of these exposures have not yet been written off and
are still categorised as performing and/or special-mention
loans,” it said.

“If there are long-term delays in debt repayment and a
lack of government support, banks will be forced to
restructure their loans to Vinashin, or eventually write off
their exposures to the group, potentially eroding their
capital.”

The $60 million payment would be the first principal
repayment on the 2007 loan, which carries a 3.5 year grace
period. Subsequently the deal repays in equal installments
every six months.
($1=19,495 dong)
(Reporting by John Ruwitch; Editing by Kim Coghill)

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Delayed Vinashin repayment would raise questions-Moody’s