The Ministry of Industry and Trade (MoIT) has reported that the Dung Quat Shipbuilding Co., Ltd. faces high risk of bankruptcy due to big losses.
The company was set up in 2006 by the Vietnam Shipbuilding Industry Group (Vinashin) which was now known as the Shipbuilding Industry Corporation (SBIC).
Under the government’s instruction for restructuring Vinashin, in July 2010, Dung Quat Shipbuilding Co., Ltd was handed to PetroVietnam. At that time, the company made accumulated losses of VND1.23 trillion (USD58.5 million) and had the total liabilities of VND7.4 trillion, including VND4.8 trillion from banks.
Dung Quat Shipbuilding Co., Ltd. faces high risk of bankruptcy due to big losses.
According to the company’s financial report, by June 30, it had chartered capital of VND1.99 trillion, while its total liabilities remained high at VND6.89 trillion, including VND1.22 trillion from banks. The firm’s accumulated losses reached VND3.67 trillion.
With huge losses and liabilities, Dung Quat Shipbuilding Co., Ltd could go bankrupt. This would also help PetroVietnam to avoid risks from the company’s operations in the future.
However, according to the MoIT, the bankruptcy would mean it would be impossible for PetroVietnam to recover VND5 trillion it had invested into the company.
Bankruptcy procedures are quite complicated and time-consuming, which would cause more costs for PetroVietnam. Asset liquidation would be a difficulty along with how to deal with the rights of more than 1,200 workers employed by Dung Quat Shipbuilding Co., Ltd.
MoIT concluded that the bankruptcy would be the last option for Dung Quat Shipbuilding Co., Ltd if other solutions were infeasible.
MoIT has submitted some solutions to save the company to the government for consideration, including transferring it to another firm.
Dtinews
