State sector dues climb to US$14.2b
State-owned enterprises (SOEs) racked up US$14.2 billion in debts by the end of last year - a figure likely to climb as a review of the sector's performance last year is not yet complete, according to Ministry of Finance officials.
The SOE sector's debt expanded by US$571 million last year, but the director of the ministry's Financial Department for Enterprises, Pham Dinh Soan, said some of the increase in borrowing had been fuelled by an expansion of operations which would boost future income.
But he conceded the debt burden was now seriously hindering efforts to partially privatise the state sector and called on the managers of SOE's to focus on debt reduction as a priority.
'An enterprise must certainly complete its public debt [strategy] before going forward with issuing equity. If it tries to go forward while immersed in old, outstanding debt then [no-one] will go for it,' he told the Vietnam Investment Review.
'[Certainly] the maximum amount of debt [can not exceed] the state's remaining share in the equitised firm,' he said, referring to the Vietnamese term for the process of partial privatisation.
Mr Pham said that in some circumstances state loans still outstanding could be written off but that 'a number of criteria will be attached'.
VIETNAM
