Vietnam's leading coffee exporter Vinacafe Buon Ma Thuot is facing debts of some VND1.6 trillion (US$77 million), with officials claiming that high interest rates and a strong dollar have put them in the tough situation.
The company, also known as Tay Nguyen Coffee Investment, Import and Export Co., said its debt even reached VND2.9 trillion at the end of last year, according to a report on news website VnExpress.
Director Vu Duc Tien said interest rates on dong loans have stayed in a high range of 16-24 percent since 2010. As for dollar loans, a rising exchange rate also made repayment more difficult for the Dak Lak-based company, he said.
Tien also admitted that Vinacafe also used short-term loans to finance long-term projects.
The Central Highlands province of Dak Lak in mid of March halted a shopping mall project invested in by the company, saying it did not have enough money to carry on with the construction.
Tien said his company's assets are valued at VND1.25 trillion. Combined with coffee stockpiles worth VND300 billion, the assets would ensure that the company is capable of repaying debts, he said.
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