Vietnam National Shipping Lines (Vinalines) is forecast to lose around VND1 trillion (USD47 million) in 2014, the fifth consecutive year of losses for the shipping giant.
Leaders of Vinalines have admitted that the competitiveness of their fleet is weaker than that of private shipping companies.
The biggest difficulty in restructuring of for the company has been the high investment required for upgrading its fleet, which experienced its best business between 2007 and 2008. In the ensuing years, business faltered and the company ran at a continuous loss. However, if the company waits for the market to recover, the fleet will have aged considerably, driving up the cost of maintenance. As a result, Vinalines has had to sell some of its ships to cut losses.
Without improved port operations and logistics, Vinalines may fail to reach total revenue of VND9.78 trillion in the first half of 2014.
Amid this difficult situation, leaders of Vinalines consider restructuring as a way to save the firm from the looming risk bankruptcy in two to three years.
To date, seven affiliates of Vinalines have completed equitisation as scheduled.
Of their current outstanding debt of VND54.78 trillion (USD2.61 billion), Vinalines has restructured USD196.3 million of it through foreign credit organisations and VND43 trillion (USD2.06 billion) through domestic commercial banks.
