Troubled state ship builder Vinashin, which had become a byword for corruption and financial mismanagement, has finally been disbanded, as the Ministry of Transport last week announced their decision to set up the Shipbuilding Industry Corp to replace the state-owned enterprise suffering from excessive debts.
Under Decision 3287/QD-BGTVT, Vinashin will be reformed as the Shipbuilding Industry Corp (SBIC), a one member limited liability company owned 100 per cent by the state, set up using VND9.52 trillion ($452 million) of capital.
The corporation will focus on shipbuilding and repair services, port and wharf operations and support industries for the shipbuilding sector.
SBIC will take over all the rights, liabilities and legal benefits of Vinashin. It is charged with accelerating the restructuring of Vinashin’s 234 subsidiaries and affiliates through measures such as merger and capital transfer. Some 165 of its companies will be sold or liquidated.
Vinashin almost went bankrupt in 2010 after expanding into a host of unrelated sectors, such as finance and tourism, a fact underlined by the exceptional number of subsidiaries started by the group.
As a result of irresponsible and unchecked expansion, the group owed more than VND86.7 trillion ($4.1 billion) in debt by the end of 2009.
A restructuring plan for the company was approved in 2010, after government inspectors uncovered the group’s financial malpractices.
On October 10, Vinashin issued international bonds in a bid to restructure its $600 million worth of foreign bank loans.
Its debts from domestic sources are estimated at VND17 trillion ($801.9 million) which the SBIC will now try to settle by the end of this year, or the first quarter of next yea