Containers are loaded onto a vessel at the nothern Hải Phòng Port. The government has asked Vinalines to reduce its stake in this port to 20 per cent. -- Photo vinalines.com.vn

HÀ NỘI (Biz Hub) — The Việt Nam National Shipping Lines will make an initial public offering (IPO) in Q1 of 2016, Vũ Anh Minh, director of the Ministry of Transport’s enterprise management department said.

The State-run company, better known as Vinalines, built an equitisation plan last year, following which the State will retain a stake of 36 per cent in it in the future.

Minh said that before the company changes into a joint stock firm, its debts will be reduced to VNĐ3.2 trillion (US$142.2 million). This value is expected to be further lowered to VNĐ1.8 trillion by the end of 2016.

Vinalines Chairman Lê Anh Sơn said the company’s debts are currently about VNĐ6.2 trillion, down 46 per cent from the VNĐ11.4 trillion recorded on December 31, 2013, before the company began to be restructured.

Vinalines faced an extremely tough time from 2010 to 2015, witnessing serious business declines in the face of economic turmoil. Its investment mistakes and mismanagement of funds even led to a debt value that more than quadrupled its charter capital in late 2010.

Prime Minister Nguyễn Tấn Dũng issued a decision in February 2013 adopting comprehensive reorganisation of the company to help it cope with the situation. The restructuring activities have focussed on marine transport, seaport exploitation and maritime services for the last three years.

“We defined that debt settlement is not only a goal of the restructuring scheme, but also a matter deciding the survival of our company in the future,” Sơn said.

Deputy Minister of Transport Nguyễn Văn Công said the company has overcome hard times, but it must seek every necessary solution to reach production and business targets, as the marine transport sector is expected to continue to face utmost difficulties this year before a possible rally next year.

Vinalines Acting General Director Nguyễn Cảnh Tĩnh said that last year was the first year that the company saw profits during the restructuring period, and this was meaningful to a firm facing financial problems and an ailing marine transport market.

Sơn told Giao thông, a newspaper published by the transport ministry last month, that the company earned a profit of about VNĐ40 billion with a total revenue of more than VNĐ18.4 trillion in 2015.

Biz Hub reported last month that the company planned to obtain a profit of at least VNĐ126 billion, with a revenue growing by three per cent year-on-year at VNĐ19 trillion in 2016.

Member enterprises

Vinalines officials said the company has completed equitising 12 member enterprises following the restructuring scheme. Five of its ports, including Nghệ Tĩnh, Cần Thơ, Năm Căn, and Cam Ranh, in addition to Sài Gòn, were privatised last year alone.

Cam Ranh’s shares began to be traded on the stock market last year, along with shares of Hải Phòng and Nha Trang, two previously privatised ports of Vinalines.

Sơn said that contrary to the situation of marine transport in the country, port operations brought about the highest business results ever for Vinalines in 2015. Its ports obtained a combined profit of VNĐ800 billion, with Hải Phòng and Sài Gòn alone earning VNĐ600 billion last year.

He said, as the government has asked Vinalines to reduce its stakes in Hải Phòng and Sài Gòn ports to 20 per cent, and continue to divest from smaller ports, Vinalines will urgently have to change its business structure.

This means that the company must understand how to improve the marine transport business keeping in mind that oceangoing freights have sharply declined and competition is getting stiffer following Việt Nam’s deeper integration into the global economy.

“This is a very big issue, which will fundamentally change development strategies of Vinalines, and we must be prepared for that now,” said Sơn.

“I suppose that in the near future, the company will concentrate on building plans to develop a new fleet of vessels so that we can enhance our competition capacity while transportation service supplies exceed demand,” he said.

According to Sơn, as of the end of last year, Vinalines divested from 37 enterprises, dissolved seven businesses and let three companies fail. It gained more than VNĐ551 billion from these activities.

Vinalines will continue to divest from 15 other businesses this year, Minh from the transport ministry said, without naming them. — VNS