Vietnam’s stated-owned enterprises (SOEs) have racked up an estimated VND200 trillion (USD9.52 billion) in bad debts.
Vietnam’s stated-owned enterprises have racked up an estimated VND200 trillion in bad debts.
The figures were compiled by Dr. Dinh Tuan Minh and were included in a report sent to the National Assembly Standing Committee on September 9.
SOEs account for up to 70% of Vietnam’s bad debts, with corporations and groups accounting for 53% of the total, he said.
The expert added that these bad debts account for 30-35% of their outstanding debts from commercial banks.
The total outstanding debts of 12 Vietnamese state-owned economic groups have climbed to nearly VND218.74 trillion (USD10.4 billion). Among these, PetroVietnam accounted for the highest proportion, with VND72.3 trillion (USD3.44 billion), followed by EVN with VND62 trillion (USD2.95 billion) and Vinacomin with VND19.6 trillion (USD933.3 million).
SOEs also account for a huge proportion of the Vietnam Development Bank (VDB)’s bad debts. Vinashin received a preferential loan of VND300 billion (USD14.2 million) at zero percent interest from the bank for salaries and staff bonuses; EVN received more than VND5 trillion (USD238 million) from the bank and Dong Banh Cement Plant borrowed VND290 billion (USD13.8 million).
Dr. Minh cited Nguyen Quang Dung, General Director of VDB as saying that, state-owned corporations and groups held 75-80% of VDB’s total outstanding loans.
SOEs are offered preferential credit so they tend to use more loans than businesses in other economic sectors, Minh commented.
He noted that SOEs will face difficulties to deal with bad debts because it is not easy for them to sell their assets or shares due the current context of economic slowdown.
Meanwhile, Vietnam’s public debt is now quite high (estimated at 54.8% at the end of 2011) and the country’s risk of a budget deficit this year will affect the Government’s support for SOEs.