Vietnam's major state firms face big losses: paper

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Several state-owned companies in Vietnam face multi-million dollar losses this year and have had trouble securing financing, a local newspaper quoted the body that oversees the state sector as saying.

State utility Vietnam Electricity could post an estimated VND11.7 trillion (US$562 million) loss this year while losses at Petrolimex, the country's top fuel distributor, could reach 1.2 trillion dong, Vietnam Economic Times newspaper said on Friday, raising concerns about the health of Vietnam's state sector.

Vuong Thai Dung, deputy chief executive officer of Petrolimex declined to comment on the estimated losses.

State shipbuilder Vinashin, rescued from bankruptcy last year, is expected to have losses of more than 3 trillion dong, the newspaper said in an online report, citing estimates by the chapter of the ruling Communist Party that oversees government-controlled businesses.

The expected losses could add fuel to a debate over the future of state enterprise reform after the near bankruptcy of Vinashin last year, and it comes at a time the economy has been struggling with high inflation.

The report said operations of most state-controlled businesses faced difficulties due to shortages of funding for major projects, leading to delays.

"Several firms could default, easily falling into crisis unless there are timely supporting measures", the report said, without naming any specific companies.

The electricity group, known as EVN, and Vinashin have been grappling with losses and heavy debt loads, with EVN having recording a loss of 23.7 trillion dong last year, the newspaper said.

Petrolimex, which came out with its initial public offering in July, reported losses of VND1.45 trillion in the first seven months of the year, the online report said.

Petrolimex imports 55 percent of the oil products that Vietnam purchases abroad and has a 55 percent share of the domestic oil products market.

EVN is facing fund shortages of VND277.2 trillion ($13.3 billion), or more than half of its demand for investment from now to 2015, which has prompted the group to propose the government to raise electricity prices this month, Tuoi Tre newspaper said in a separate report on Friday.

However, electricity prices might not be increased at the moment because of the government's efforts to contain inflation, Tuoi Tre quoted Do Manh Tuan, deputy head of the government office's Industry Economy Department, as saying.

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