Vietnam govt to service debt for troubled cement projects

Vietnam govt to service debt for troubled cement projects
Published: 05 September 2011

The Vietnamese government will provide funds to help four cement projects make foreign debt payments, the finance minister said, including one that state media says is unable to service a loan from Australia and New Zealand Banking Group Ltd.

The projects were among 16 in the cement sector that had government-guaranteed loans from foreign creditors worth US$1.365bn, Vuong Dinh Hue told reporters on Thursday.

Hue said the ministry would assist with up to three scheduled payments for the four troubled projects. If they continued to fail to pay on their own after that, they would have to start selling assets, he said.

"Up to now, all the four projects haven’t yet failed to make three payments," he said.

The government allowed state shipbuilder Vinashin to default late last year on a US$600m loan from a consortium of foreign banks because it had not given explicit guarantees.

On Wednesday, state-backed newspaper Tuoi Tre said Dong Banh Cement Joint Stock Co, a subsidiary of state-owned Song Da Group, was asking the government for help in paying US$3.4m back to ANZ.

Hue said Dong Banh had foreign debt worth US$45m. The other three projects in need of government help were Thai Nguyen with US$59m in foreign debt, Tam Diep with US$133m in foreign debt and Hoang Mai with US$145m in foreign debt.