Ministry-run debt trading firm seeking upgrade, expansion

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A senior official from the Finance Ministry-run Debt and Asset Trading Corporation (DATC) has proposed upgrading his firm to a state corporation accompanied by affiliated companies to boost its capacity to buy debts.

News website Saigon Times quoted DATC deputy general director Pham Manh Thuong as saying December 17 that the firm was seeking permission to expand its operations and capital.

He proposed to set up a number of DATC-affiliated firms with the initial capital of VND2 trillion each to attract investments in the debt industry.

Thuong also asked for the issuance of government-guaranteed bonds in exchange for bad debts.

Since its launch in 2004, the firm, tasked with cleaning bad corporate debts and helping state firms restructure, has bought spoiled debts with a total book value of VND9.28 trillion (US$436.2 million) from businesses, 90 percent of which were commercial banks.

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Accordingly, DATC has facilitated the restructuring of 60 firms.

The country has another firm, the not-for-profit VAMC, which was launched in July and entrusted with the sole task of bank debt cleanup.

According to Thuong, bad debts in the banking system were estimated at VND142.27 trillion ($6.69 billion), or 4.64 percent of outstanding loans, as of the end of August.

The ratio was over 8.6 percent late last year.

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