Vietnam offers Vinashin interest-free loans to pay wages

TN News

Email Print

Troubled state shipbuilder Vinashin can take government loans at zero interest rates to pay its employees, Prime Minister Nguyen Tan Dung has directed.

Vinashin and the companies it has transferred to Vinalines will receive the preferential loans with terms of up to 12 months to settle payments for salaries, severance pay, and social, health and unemployment insurance.

Vietnam Development Bank, a state-owned lender that funds public projects, and Vietnam Bank for Social Policies, a government lender that raises money mainly for social welfare projects, will provide the loans, said the directive that will take effect on February 15.

Earlier, the government has granted four separate tax concession measures to Vinashin, including a deferral of taxes on imported equipment, and a general one-year grace period.

The shipbuilder had racked up debts of about VND86 trillion (US$4.4 billion) as of June, including more than VND100 billion ($5.13 million) in salaries.

Last week, the firm failed to make an initial $60 million repayment on a $600 million loan from foreign creditors.

Vietnam and its state-backed companies will face greater difficulties in borrowing money after reports of the default, according to Moody's Investors Service.

More Business News