Creditors of a US$600 million, eight-year loan for Vietnam's troubled state shipbuilder Vinashin will meet on Tuesday to discuss a request for a standstill from the near-bankrupt conglomerate, Basis Point reported on Friday.
The creditor group would be led by Elliott Advisors and Standard Chartered Bank, sources told Basis Point, a Thomson Reuters company.
Vinashin sent a request for a "standstill" to lenders on Nov. 29, after the group of creditors made at least two written requests to the borrower that it pay its first installment of $60 million on Dec. 20 as stipulated in the original loan agreement, sources said.
The Vinashin request to delay the payment did not outline an alternative repayment plan, a source who has seen the letter from Vinashin told Basis Point.
"It's difficult to make a decision on what to do without further written clarity from Vinashin about exactly when and how it wants to repay the loan. It's a big concern and banks will be discussing on Tuesday how to proceed," a banker on the deal said.
A bank source told RLPC that US$5 million in Vinashin debt was heard offered on the market at 67 percent of par, although traders are currently bidding in the low 60s.
State media quoted Vinashin chairman Nguyen Ngoc Su as telling a news conference on Nov. 19: "We have met with contacts at the creditor, had a discussion, and asked that the debt be delayed by one year so that we can start to repay it in December 2011."
The $600 million loan, with Credit Suisse as sole bookrunner, was signed in 2007 and has a 3.5-year grace period which ends on Dec. 20. The facility repays in equal installments every six months thereafter until maturity in June 2015.
The loan paid a top-level all-in of 154 basis points in general syndication via a margin of 150 basis points over Libor. That pricing was considered generous at the time compared to the Vietnam sovereign CDS levels, which were trading at 65 basis point, Basis Point reported.
At least 20 other banks and institutional investors joined the loan, largely because of a letter of support from the Vietnamese government, which helped the borrower obtain the same ratings as the sovereign, Basis Point said.
Bank of Kaohsiung, Bank of Taiwan, Depfa, Dexia Bank, Dresdner Bank, DZ Bank, Erste Bank, Kookmin Bank, Malayan Banking, National Bank of Kuwait, StanChart and Taiwan Cooperative Bank are among lenders to the facility.
Vietnam officials announced in June that Vinashin was near bankruptcy and would be restructured.
The government has been hiving off non-core assets to fund loan repayments and recapitalize the parent company, with the intention of refocusing Vinashin on core businesses such as shipbuilding and ship repair.
Non-core subsidiaries and incomplete projects, including some unfinished ships, are being transferred to Vietnam Oil and Gas Group, also known as Petrovietnam, and Vietnam National Shipping Lines, or Vinalines.
Vinashin was saddled with debts of around $4.2 billion just prior to the restructuring, according to local press reports at the time.
The $600 million loan for which Vinashin is seeking to defer payment, remains on the parent company's books, while local bankers believe loans and bonds drawn by subsidiary companies or tied to specific projects, mostly bilaterals through local banks, have been or will be transferred to PetroVietnam and Vinalines.