“There is no problem with our finance, and in fact we are very strong,” chairman Doan Nguyen Duc said.

“I think this is unhealthy competition. Some companies have tried to spread rumors to hurt us.” 

The media said earlier this month that the company had a high debt-to-asset ratio of 63 percent last year, with total debts topping VND15.5 trillion (US$744.5 million), 75 percent of it interest bearing.

Duc said the high debt figure also included components that are not actually debts such as advance payments from apartment buyers and tax arrears of VND747 billion that the company has already paid.

The company also holds cash worth VND3 trillion and bonds worth VND2.3 trillion, which means its consolidated debt is only VND6.4 trillion and hence a debt ratio of 25 percent, Duc said.

It is a violation of business ethics for other competitors to spread rumors that HAGL would go bankrupt, he said.

“I’m not very sure but our business strategies may have affected them,” Duc said. “For instance, our policy to lower apartment prices can bring market prices down because we have a large number of units. So it may upset them.”

Like us on Facebook and scroll down to share your comment

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

Nguyen Hoai Giang, chief executive of the Binh Son Refining and Petrochemical Co, which operates the refinery in the central province of Quang Ngai, said during the maintenance  several technical problems would be fixed.

Last July the refinery was shut down for two months for its first maintenance, which cost US$40 million and saw 75 technical defects fixed.

Built by the state-owned oil and gas group PetroVietnam at a cost of over $3 billion, Dung Quat went into operation in 2009. It produces 6.5 million tons a year, meeting 30 percent of the country's requirements. 

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

Vietnam National Shipping Lines has scaled down a plan to expand its fleet, cutting the cost estimate by one-third to VND68 trillion (US$3.26 billion) amid criticism that the state shipper is operating ineffectively. 

According to the company, often known as Vinalines, it originally planned to invest VND100 trillion to buy more vessels. But due to negative prospects for the shipping market, it has decided to revise the plan.

The state-owned company also said it will not seek funding from the government budget and finance its purchases with bank loans. The target is to increase the total load capacity of its fleet to 5.6 million by 2020.

Vinalines said its 154-ship fleet with a total load capacity of 3.4 million tons accounted for 45 percent of Vietnam’s shipping capacity at the end of last year. The original plan targeted a capacity of 15 million tons by 2015.

The company mostly leases its ships, with Vietnam Ocean Shipping Company being the only subsidiary that handles all shipping services with its own fleet. Analysts said the leasing business is not a stable source of revenue for the company, while also exposes it to liabilities if the leaseholders are caught up in disputes or lawsuits.

Experts also criticized the company for buying many old vessels whose values have dropped sharply.

A Vinalines official who requested annonymity admitted that due to limited financial resources, its subsidiaries had to buy old vessels, breaking a rule that bans local companies from buying ships already in use for more than 15 years.

“When the transport sector was still doing well, prices of old ships increased every month… But during a market downturn, those ships became a burden because their prices dropped and it’s not easy to sell them,” he said.

Chu Quang Thu, former director of the Vietnam Maritime Administration, said Vinalines needs to be restrutured and make public its financial results first before starting to buy more ships.

It is not practical to invest a large amount of money for expansion unless the company is competitive enough, he said.

Vietnam’s shipping market is now dominated by foreign shipping lines. Even though Vinalines reported profits over the past few years, economists have expressed their doubts, calling for a thorough audit of the company to make sure it has not been hiding losses.

Like us on Facebook and scroll down to share your comment

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

According to the ratings agency, the outlook for both of the ratings is stable.

“The ratings and stable outlook reflect the success so far of efforts by Vietnam’s authorities to tackle the macro-financial imbalances that arose in 2010 and 2011,” said Art Woo, Director in Fitch’s Asia-Pacific Sovereign Ratings group.

“However, despite recent signs of greater macroeconomic stability including lower inflation, a stronger current account position and a more stable dong exchange rate, further evidence that these improvements have become entrenched and reform of the banking and state-owned enterprise sector is needed to put upward pressure on Vietnam’s sovereign ratings,” Woo said.

Since implementing fiscal and monetary tightening measures to restore macroeconomic stability under Resolution 11 in February 2011, Vietnam has made vital progress in taming inflation, Fitch said. Foreign-direct investments have remained robust for the country, totalling US$7.4 billion in 2011, or 6 percent of GDP, the agency noted.

Fitch estimated that Vietnam’s official reserves may have reached $16-17 billion at the end of March, compared to $14.1 billion at end-November.

It also said recent policy rate cuts in March and April is an appropriate response to economic slowdown and decelerating inflation. The country’s economic slowdown has deepened as real GDP grew just 4 percent year-on-year in the first quarter, down from a 6.1 percent rise in the previous quarter.

Despite recent improvements, the agency said Vietnam still needs to strengthen its banks and state-owned enterprises.

“Vietnam’s banking sector remains a source of weakness and a constraint on the sovereign rating… The system is thinly-capitalised and asset quality is deteriorating,” Fitch said in the report.

Meanwhile, reform of SOEs and public investment is likely to be a gradual process. “As a consequence, given the uncertain health of the SOE sector and low transparency, SOEs remain a large contingent liability for the sovereign,” the report said.

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

According to Resolution 13, small and medium enterprises and labor-intensive companies will be allowed to delay value-added tax payments for April, May and June by six months. Real estate developers are given up to 12 months to pay land use taxes.

The cost of land leases for 2012 will also be reduced by 50 percent, the resolution said.

The Finance Ministry will also seek approval from the National Assembly to reduce by 30 percent the corporate income tax payments for small and medium companies. Meanwhile, the State Bank of Vietnam has been ordered to bring down interest rates further.

The resolution did not say how much money the measures will cost. Previously, the government had estimated that the whole tax relief package would be worth VND29 trillion (US$1.4 billion).

Nearly 18,000 companies shut down or suspended operations in the first four months of the year. The economy expanded 4 percent in the first quarter, the slowest pace since 2009.

Like us on Facebook and scroll down to share your comment

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

Retail sales surged 20 percent in the first four months from a year ago, but if inflation is factored in, the rise is less than 5 percent, Dinh Thi My Loan, general secretary of the Vietnam Retailers Association, told a conference in Ho Chi Minh City Friday.

Loan said this rate was too modest, compared to the record low annual increase of 7.6 percent recorded in 2010.

Vietnam’s leading supermarket chain Saigon Co.op said its revenues in the first quarter fell 10 percent year-on-year while other retailers also reported difficulties including low sales and higher input costs.

According to the Ministry of Planning and Investment, 17,735 businesses shut down or halted operations in the first four months, up 9.5 percent from the same period last year. More than 5,000 of these companies were wholesalers or retailers, the ministry said.

Vietnam’s consumer confidence fell to the lowest level in the first quarter since mid 2010 as most consumers said they will refrain from buying even the products that they need, a Nielsen survey found.

Loan said the government has announced a relief package including tax cuts and deferments, but local companies need more support. Production costs should be cut so that prices can be lowered to encourage consumption, she said.

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

Some credit institutions are going through mergers and acquisitions voluntarily and, at the same time, are taking measures to improve their management, Governor Nguyen Van Binh was quoted as saying in a report on news website VnExpress Thursday. The report did not identify the weak banks.

The banking system is operating more effectively, he said, adding that all banks have been asked to submit their own restructuring plans.

Binh said banks will be forced to merge if necessary. The central bank will also introduce new rules that require more transparency and encourage lenders to list on the stock market.

He also said state-owned companies will have to divest from the banking sector.

Like us on Facebook and scroll down to share your comment

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

“We are aware of problems in how fuel prices are calculated, but we plan to fix them at the same time,” Nguyen Tien Thoa, head of the Price Control Department under the Ministry of Finance, told the press Thursday.

He said officials will consider shortening the period for which the average fuel price is calculated to 10 or 20 days from 30 days.

A new policy that puts a limit on how much commission fuel distributors can pay their retailers may also be introduced, he said, adding that local companies have been shelling out excessive commissions to expand market share.

Vietnam lowered gasoline and diesel prices Wednesday, a long-anticipated move following a decline in global oil prices. The price of 92-RON gasoline is cut to VND23,300 (US$1.12) per liter from 23,800.

The price cut, which came after two consecutive hikes in March and April, was met with widespread public displeasure. Many consumers and economists said the reduction was overdue and too little to make an impact.

Thoa said the average gasoline price during the 30-day period ending May 8 was VND828 per liter lower than the retail price on that day.

However, the Ministry of Finance decided to cut prices by VND500 per liter only since it was necessary to bring back import tariffs on fuel products, Thoa said. The import tax rate on gasoline and diesel is now 2 percent, compared to zero previously.

Like us on Facebook and scroll down to share your comment

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law

The cost of power production has risen 3.29 percent this year, or VND42.85 per kilowatt-hour, said Nguyen Tien Thoa, head of the Finance Ministry’s Price Control Department.

A price hike between 5 and 10 percent is also necessary to help the utility, known as EVN, offset its losses, he said. 

EVN first announced a plan to seek government permission to raise power prices in March, saying higher input costs were placing a burden on the company. It reported an estimated loss of VND3.5 trillion in 2011 (US$166.4 million).

Power prices are still subsidized by the government. The most recent hike was last December, when the average power tariff was increased by 5 percent to VND1,304 per kWh.

The government plans to restructure the electricity market in three steps – creating a competitive generating market by 2014, a wholesale market by 2022, and a competitive retail market after 2022.

The first stage of launching a competitive power generation system has been delayed several times. According to a statement on the government’s website Thursday, the launch has been rescheduled for July 1.

Like us on Facebook and scroll down to share your comment

Source : thanhniennews.com

Vietmam Law - Vietnam Law Firm - Viet An Law