VP Bank buys Cai Lan Port stake
Vinalines plans to sells off its 51 per cent of stakes in Cai Lan International Container Terminal (CICT), Thoi bao Kinh te Sai Gon (Sai Gon Economic Times) newspaper reported this week.
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| Containers are moved out of Cai Lan International Container Terminal in Quang Ninh Province.— VNA/VNS Photo Danh Lam |
Vinalines, a State-owned company, proposed selling its majority stake in the terminal to VP Bank as a solution for its outstanding debt. The deal is pending for revision and approval from the Government, the Ministry of Transport and other related ministries.
By the end of 2014, Vinalines amassed debts of nearly VND9 trillion (US$428.5 million), the major reason for the recent deal proposal.
If the transfer to VP Bank goes through, they will become the majority shareholder whose first task will be the handling of the CICT firm's debts.
CICT has been in operation for two years already, yet has only utilised 20 per cent of its potential capacity, which is 520,000 TEU/year.
Shipping companies have been cutting back the number of their ships docking at the port because of its distant and inconvenient location, as well as its high port fees.
The CICT firm took large amounts of bank loans they haven't been able to pay back due to poor profits. CICT's bank debts tripled from US$4.4 million in 2012 to $13.6 million last year.
The Cai Lan Terminal faced additional difficulties after the Baltic Dry Index (BDI), used to measure changes in the cost of transporting raw materials, decreased sharply from 770 points in the end of last year to 560 points this month. Forecasters says it seems unlikely to improve anytime this year.
CICT now faces difficulty calling in $20 million in investment money from its two shareholders, Vinalines' CPI and SSA Marine, an American cargo-shipping company. The capital is sorely needed to allow the firm to stay in operation and deal with its financial situation.
However, the foreign shareholder, SSA Marine, has said it will not make additional investments as it wants to maintain its current 49 per cent stakes. — VNS
