Vinashin creditors approve zero-coupon bond extension: report

Workers build a ship for delivery later this year at a Vinashin shipyard in the central province of Quang Ngai.Workers build a ship for delivery later this year at a Vinashin shipyard in the central province of Quang Ngai.

Vietnamese state-owned shipbuilder Vinashin has announced that a majority of its creditors have consented to a proposal to replace its defaulted US$600 million loan with a 12-year government-guaranteed bond, a report on the IFRAsia web site said Thursday.

The restructuring proposal involves swapping the $600 million loan, plus accrued and unpaid interest of $23 million, with $623 million in zero-coupon bonds. The bonds, with a guarantee from the Ministry of Finance, will have a 12-year tenor. Interest on the bonds will accrete at 1 percent per annum and will be paid on maturity, along with the principal.

The IFRAsia report quoted a Vinashin’s notice to all lenders as saying that the proposal had been approved by creditors holding 75 percent of the $600 million loan by value and 51 percent by number.

The report said the deadline for the remaining creditors to revert with their vote on the proposal has been extended to March 20.

“If the proposal does not get the consensus of all creditors, a scheme of arrangement will be implemented in the UK, which could take around six months to complete and could, potentially, carry the same terms as the current proposal,” it said.

KPMG is advising Vinashin, or Vietnam Shipbuilding Industry Group, on the restructuring.

Vinashin received the $600 million financing in 2007 from a group of institutions led by Credit Suisse. It missed the first $60 million payment on the principal in December 2010, putting the loan into default.

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