Vietnam Airlines issues US$350-million shares for stakeholders
The move raises Vietnam Airlines’ registered capital to nearly $1 billion that will help improve its dire financial situation during the pandemic.
Vietnam Airlines has successfully sold over 796 million shares to 27,627 existing stakeholders, or 99.51% of the volume on offer.
|Vietnam Airlines has been severely affected by the pandemic. Source: Vietnam Airlines|
The placement took place from August 5 to September 14, which helped raise over VND7.96 trillion ($350 million), and subsequently increased the airline’s registered capital to VND22.14 trillion ($1 billion).
The airline is expected to use the proceeds to maintain liquidity and improve the financial situation that has been severely affected by the pandemic.
The Government is currently Vietnam Airlines’ largest shareholder, holding 86.19% stake via the Commission for State Capital Management (CSCM), followed by government-investment arm State Capital Investment Corporation (SCIC) (31.14%), and Japanese aviation company ANA Holdings (5.62%).
SCIC became a major shareholder of the national flag carrier after forking out VND6.89 trillion ($300 million) to acquire a 31.08% stake, which is part of a resolution passed by the National Assembly (NA) last year that allows the Government to bail out the airline with a rescue package worth VND12 trillion ($522 million).
Vietnam Airlines also signed a credit contract of VND4 trillion ($173 million) from three local banks, as the State Bank of Vietnam (SBV) provided these lenders with a refinancing loan of the exact amount at a 0% interest rate.
The Ministry of Planning and Investment (MPI) previously estimated Vietnam Airlines’ overdue debt of VND6.24 trillion (US$272 million) could lead to its bankruptcy. The recent Covid-19 outbreak in Vietnam has added to the woe as the airline estimated further losses of VND10 trillion (US$436 million) in the first half of 2021.
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