Gov’t to bail out troubled shipbuilder

The government will take drastic measures and supply more capital to state-owned Vietnam Shipbuilding Industry Group and help it finish ongoing projects, Deputy Prime Minister Nguyen Sinh Hung said Saturday.

Hung's statement came during a meeting with several members of the group. He encouraged them to stay strong and try to maintain production.

The group, known as Vinashin, is on the verge of bankruptcy with accumulated debts of VND86 trillion (US$4.5 billion). The government has ordered an immediate restructuring of the group, retraining focus on its core business of shipbuilding.

“Local banks have worked with Vinashin to develop a shipbuilding industry,” Hung said. “Now that the industry faces difficulties, banks should continue to go along with shipbuilding factories to complete the construction of unfinished ships. Ships have to be finished to be sold so that debts can be repaid.”

Hung will chair a steering board overseeing the restructuring process.

According to an August 4 statement on the government website , Vinashin faced the threat of orders worth $700 million being cancelled.

Nguyen Duc Than, general director of Ha Long Shipbuilding, a Vinashin subsidiary, said capital was in fact the biggest problem for the company now.

“Without enough capital to build ships, the chance is high that contracts will be cancelled,” he said.