Report: Vietnam’s state-owned companies facing multi-million dollar losses

Several state-owned companies in Vietnam face multi-million dollar losses this year and have had trouble securing financing, a state-run newspaper quoted the body that oversees the state sector as saying. State utility Vietnam Electricity could post an estimated 11.7 trillion dong (US$561.6 million) loss this year while losses at Petrolimex, the country’s top fuel distributor, could reach 1.2 trillion dong (US$57.6 million), Vietnam Economic Times newspaper said, 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 (US$144.0 million), the newspaper said, 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, Reuters reported. (September 9, 2011)