Vietnam: Vinaconex on target with restructuring
Vietnam Construction and Import-Export JSC (Vinaconex) claims to have met its restructuring targets after successfully addressing shortcomings in the firm's assets, capital sources and operations. Lowering investments into non-core businesses and reducing its debts has enabled Vinaconex to fulfil its asset restructuring, capital and operational targets to foster its core construction business.
The Vietnamese construction company confirmed it would focus on core business areas and resolve outstanding debts in the near future.
Vinaconex disengaged from several subsidiaries and member companies from early 2012. In the 2Q12 the corporation put its stakes in Vinaconex Dung Quat and Vinaconex Luong Son-Hoa Binh Cement JSCs up for sale and later that year auctioned off its stake in Vinaconex-VCN and Vinaconex Hoang Thanh JSCs.
In late October 2012, the corporation announced it had transferred its stake in Vinaconex Xuan Mai JSC. It also announced its exit from Vinaconex 6 (VC6), Viconstone (VCS) and the North An Khanh project. Apart from these firms, the corporation sold stakes in Vinaconex Thanh Hoa, Postal Insurance, Bao Minh Insurance and Ocean Thang Long.
Vinaconex also considered divesting from several other firms, including Vinaconex 3, Construction Company No 4, Vinaconex Danang and Vinaconex Quyet Thang, but this proved more difficult as the firms were already struggling.
The company also recently completed the sale of a 70 per cent stake in debt-ridden Cam Pha Cement together with resolving the debts accrued by Cam Pha Cement with Vinaconex acting as guarantor to the military-run Viettel Group.
The corporation succeeded in raising its chartered capital to over VND4.4trn (US$210m) driving down its debt/equity capital ratio with support from major partners – the state investment fund SCIC and Viettel.
Apart from massive capital divestments, Vinaconex has proven proactive in recovering debts, a move prioritised in 2012, effectively recovering over US$50m last year alone.
