Dau tu has quoted its sources as saying that the Song Da Group is meeting troubles with the big debt incurred by one of its subsidiary – the Ha Long Cement Joint Stock Company.
The cement factory was built in 2008, when the real estate market boomed and the demand for cement for civil engineering works increased dramatically. Everyone would think of set up a cement factory at that time, especially when there was profuse limestone supply source.
If the construction plan had been implemented on schedule, the debt payment would not have been beyond the Ha Long Cement Factory’s capacity. However, as the construction work was late by one year, the factory missed the best opportunities to sell products when the market was still hot.
The Ministry of Finance was assigned by the Prime Minister to guarantee for the cement factory to borrow foreign loans. The ministry then acted as the guarantee for the Song Da Corporation, the holding company of Ha Long, to buy the loan, which then re-lent to Ha Long 3335 billion dong.
However, Ha Long has been taking loss, 78 billion dong in 2009 and 500 billion dong in 2010, while it now has to pay the principal to the foreign banks. Dau tu has reported that the accounts payable is 400 billion dong a year.
Misfortune has also come to the Cam Pha Cement Plant which became operational in January 2009 with the chartered capital of 2 trillion dong. Four years ago, when inaugurating the plant, the leaders of Vinaconex, the parent group of Cam Pha, believed that Cam Pha would be the goose that lays golden eggs.
Cam Pha really had every reason to hope for a bright prospect, because it can take full advantage of the well known brand “Vinaconex” or the parent group, it had modern production lines, mines and specialized port.
However, by November 2011, Cam Pha had incurred the loss of 1200 billion dong, while the loss would be 1600 billion dong, if counting on the loss due to the exchange rate fluctuations.
In an effort to calm the shareholders down, Vinaconex is considering selling Cam Pha’s shares. However, who will buy the shares?
Dau tu has quoted its reliable sources as saying that the investors who are interested in Cam Pha shares only agree to pay less than 10,000 dong, or below the face value for every Cam Pha’s share.
One of the interested investor is Vicem, the Vietnam General Cement Corporation. Luong Quang Khai, Deputy General Director of Vicem, has said that the corporation’s principle is taking full advantage of the existing factories; therefore, it is considering buying Cam Pha’s shares.
Meanwhile, Thoi bao Kinh te Vietnam has reported that Vicem would have to pay 4700 billion dong in debt in 2012.
In 2011, Vicem’s profit was modest at 540 billion dong, while the profit on investment capital was 1.97 percent, and the profit on stockholder equity 4.35 percent.
Dau tu newspaper in late 2011 once reported that four cement plants could not pay debts to foreign banks, including the Hoang Mai, Dong Banh, Thai Nguyen and Tam Diep. Therefore, the national accumulation fund for debt payment would have to use 30-40 million dollars a year to pay debts for the cement plants.
The Ministry of Finance has anticipated that more cement factories would meet difficulties in pay debts in the next 3-5 years.
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