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| Viet Hoa Kenmark Industrial zone abandoned and closed. Local authority in Hai Duong has given their consent for creditor banks to sell off the site in the investor's stead. — Photo baoxaydung.com.vn |
HA NOI (Biz Hub) – Hai Duong Provincial People's Committee have authorised the Bank for Investment and Development (BIDV) and Sai Gon Ha Noi Commercial Joint Stock Bank (SHB) to sell off the Viet Hoa-Kenmark Industrial Zone as loan collateral since its Taiwan-based owner Kenmark Industrial Co., Ltd. has failed to pay back the banks' loans of US$67.6 million.
According to enternews.vn, Kenmark Industrial Co., Ltd. had failed to find a suitable buyer to sell off their industrial zone before the deadline of August 31 that was set by the local authority. This resulted in its two main creditors BIDV bank and SHB bank selling off the venue to retrieve their loans' worth.
"The key objective is to conclude the matter, retrieve the loans for the banks and reinstall the project since the venue has been off the market for too long, thus causing a loss in the province's business environment," said an informed source.
The Viet Hoa-Kenmark Industrial Zone had been under construction by Kenmark Industrial Co. since 2005. The company had since taken loans totalling US$67.6 million from BIDV and SHB in 2008, two thirds of the total investment for the first phase.
BIDV is the largest creditor with a loan of US$39.1 million, while SHB provided a loan of US$18.5 million, and has since incorporated a smaller loan of US$10 million after they acquired Habubank, another creditor to Kenmark Co.
The project is situated at a very profitable location right at the entrance to Hai Duong City, and has had other potential buyers, but Kenmark Co.'s given price was too high for the seller and buyer to reach an agreement.
In retrospect, problems arose when Kenmark Co.'s civil disagreement resulted in their two partners closing factories within the industry zone. Without funding for further operation and investment, Kenmark's Chairman Hwang Ding Kuo left for Taiwan in 2010, while his creditors sealed off the site.
This time around, the banks as Kenmark Co.'s creditors will have the final decision on fixing the price of the project and in finding a new buyer. The original investor has therefore been discredited.
At present, it is still too early to assess the actual price and method of transaction. The Management Board of Hai Duong Industrial Zone is working with the banks to devise a detailed plan to submit to the Hai Duong Provincial People's Committee for approval. The estimated price cannot be lower than the loan of US$67.6 million, and this project needs a fast solution to clear the way for other foreign investors in the province. — VNS