Local banks provide US$173-million refinancing loans to Vietnam Airlines
The carrier plans to use the loan to pay overdue debts and operational costs.
Vietnam Airlines today [July 7] signed a credit contract worth VND4 trillion (US$173 million) with three local commercial banks to help the national flag carrier cope with the Covid-19 impacts.
|Overview of the signing ceremony. Photo: Vietnam Airlines|
The loan came from the refinancing fund of the State Bank of Vietnam (SBV) worth the exact amount and at a 0% interest rate for Vietnam Airlines’ lenders, including Southeast Asia Commercial Bank (SeABank), Vietnam Maritime Commercial Bank (MSB), and Saigon-Hanoi Commercial Bank (SHB).
Last year, the National Assembly (NA) ratified a resolution that allows the Government to work out a VND12-trillion (US$522 million) rescue package for Vietnam Airlines.
The airline, in which the Government currently holds an 86.19% stake via the Commission for State Capital Management (CSCM), also gets the permission to sell additional shares worth VND8 trillion (US$345.68 million) to existing shareholders to raise its registered capital.
At the contract signing ceremony, the Chairman of Vietnam Airlines Group Dang Ngoc Hoa stated the capital would be used to pay overdue debts and operational costs.
“Vietnam Airlines does not intend to use the loan amount for investment or procurement activities,” Hoa said.
In line with the Government’s support, Hoa noted Vietnam Airlines has been pushing for restructuring by scaling down operation and optimizing costs to overcome the Covid-19 crisis, which has caused severe losses to the aviation and tourism industries.
“We expected to finalize the required legal steps to raise registered capital by VND8 trillion (US$345.68 million) by selling shares to existing shareholders by the late third quarter,” he added.
The Ministry of Planning and Investment (MPI) previously estimated an overdue debt of VND6.24 trillion (US$272 million) could lead to the bankruptcy of Vietnam Airlines.
Given the severe Covid-19 situation in Vietnam, the airline estimated losses of VND10 trillion (US$436 million) in the first half of 2021.
- Vietnam prioritizes macroeconomic stability in 2023: PM
- Digital technology to spearhead Vietnam’s drive for Industry 4.0
- Business confidence in Vietnam improves to a three-month high: S&P Global
- Hanoi leaders call for high productivity after Tet break
- Hanoi's businesses resume operation after Tet
- Arrivals to Hanoi surge by over 300% during Tet holiday
- Foreign investors remain confident about Vietnam's business environment
- Vietnam’s tourism forecast to strongly rebound in five years
- Tourism firms upbeat about Vietnam's 2023 outlook
- Surge in travel demand in Vietnam's airports ahead of Tet
Vietnam prioritizes macroeconomic stability in 2023: PM
Hanoi creates favorable conditions for expansion of gas stations
Vietnam publishes book on Communist Party chief’s anti-corruption
Hanoi ranked 5th among safest cities in Southeast Asia
Hanoians show passion for flowers
Vietnam’s tourism forecast to strongly rebound in five years
Admiring 2,023 feline statuettes made by Hanoi artist
Overseas Vietnamese eagerly await Tet and spring
Switzerland to support Vietnam’s transition to green economy