Vietnam’s State-Owned Shipbuilding Company at Risk of Bankruptcy

Vietnam’s state-owned shipbuilding company SBIC is facing bankruptcy, following a resolution passed by Vietnam’s Political Bureau last month. Deputy Minister of Transport Nguyen Xuan Sang is leading the working group tasked with implementing the resolution, emphasizing that the bankruptcy was inevitable after efforts to restructure the company proved unsuccessful. SBIC’s debt balance remains large compared to total assets, prompting the need for a transfer of ownership to enable the company and its subsidiaries to operate without the burden of old debts.

The state-run shipbuilding industry in Vietnam has been struggling for almost a decade due to alleged mismanagement and cost overruns. SBIC, which was restructured from former state shipbuilder Vinashin in 2013, has been unable to make any profit, according to a recent report by the Transport Ministry. The bankruptcy process will involve a full evaluation of SBIC’s operations, drafting of a bankruptcy roadmap, and filing for bankruptcy by the company and its subsidiaries.

Once the bankruptcy case is resolved, liquidation of assets and debt payment will be carried out in accordance with a court ruling. Despite the collapse of the sector in Vietnam, Deputy Minister Sang sees this as an opportunity for shipyards to enter a new phase and seize the moment for development, especially as the maritime industry is gradually replacing old ships with a new generation of vessels running on alternative fuels.

Source .