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February 8, 2008 |
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* VIETNAM: Transportation Firms to File Bankruptcy Five of the Ministry of Transport's most indebted firms, namely Cienco 5, Work Company No 86, Water Work Construction Consultation Company No 1, Work Company No 5 and Southern Work Company, will declare bankruptcy in the 2008-09 period, Thai Press reports relates citing Transport Deputy Minister Le Manh Hung. Mr. Hung was quoted by the news agency as saying, "The companies have suffered losses over a long period of time and the debt is currently so large it requires immediate resolution." The report, citing statistics from the Ministry of Finance, states that five firms are among 11 companies affiliated with the transport ministry and are in debt as much as US$389 million. Mr. Hung, the report relates, attributed the firms' debts to their carelessness with construction projects, whose investment capital sources were unreliable. Mr. Hung told the news agency that construction firms of transport projects often had to pay construction fees in advance and then retrieve payment from the project owners. In this case the firms failed to recover payments from unreliable capital investment sources, he added. "The firms lose 10% of their profits each year due to delays in payment and mounting interest rates," Mr. Hung was quoted by Thai Press as saying. The report notes that the debt also resulted from firms bidding on construction works at prices that were too low, just so as to secure contracts. Mr Hung said told Thai Press that transport ministry would speed up the firms' equitisation. As for the debts, the ministry expected to deal with the ailing firms' outstanding debt through the Debt and Asset Trading Company as per current legal regulations, he added. |
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