Citi Bank lends Vinalines $130 million for expansion
Citi Bank has agreed to provide financing of US$130 million to the Viet Nam National Shipping Lines (Vinalines) to purchase ships and upgrade port facilities. Terms and interest rates were not disclosed.
In announcing the deal yesterday, Citi Bank country director Charly Madan suggested that the financing package would "open doors for Vinalines to access international funding given the precedent in place through these loans."
Citi Bank’s loan was Vinalines’ first in the international syndicated loan market. As primary investor in the construction and operation of several major seaport projects in Viet Nam, they were expected to have large capital needs.
Besides bank loans, Vinalines has already managed to raise capital through corporate bond issues on overseas markets and sales of shares in subsidiary companies.
The group is seeking an international bank to underwrite corporate bond issues in Japan, the EU and the US, said Vinalines CEO Mai Van Phuc. The group was in discussions with Moody’s and S&P about ways to build creditworthiness prior to issuing bonds.
"The Government also plans to allocate $500 million to us to be raised from issuing Government bonds on overseas markets," said Phuc.
Vinalines is presently undergoing equitisation. It has completed equitisation of 45 subsidiaries and plans to equitise the remaining three this year. The group has reduced State capital in some service companies to less than 50 per cent but still retains a controlling stake in some major companies operating in seaport construction.
Phuc said that this would soon change, however, with bilateral agreements and WTO commitments requiring the sector to be opened to offshore investors.
During 2010-12, State holdings in all of Vinalines’ major subsidiaries would be reduced to less than 50 per cent, Phuc said.
In announcing the deal yesterday, Citi Bank country director Charly Madan suggested that the financing package would "open doors for Vinalines to access international funding given the precedent in place through these loans."
Citi Bank’s loan was Vinalines’ first in the international syndicated loan market. As primary investor in the construction and operation of several major seaport projects in Viet Nam, they were expected to have large capital needs.
Besides bank loans, Vinalines has already managed to raise capital through corporate bond issues on overseas markets and sales of shares in subsidiary companies.
The group is seeking an international bank to underwrite corporate bond issues in Japan, the EU and the US, said Vinalines CEO Mai Van Phuc. The group was in discussions with Moody’s and S&P about ways to build creditworthiness prior to issuing bonds.
"The Government also plans to allocate $500 million to us to be raised from issuing Government bonds on overseas markets," said Phuc.
Vinalines is presently undergoing equitisation. It has completed equitisation of 45 subsidiaries and plans to equitise the remaining three this year. The group has reduced State capital in some service companies to less than 50 per cent but still retains a controlling stake in some major companies operating in seaport construction.
Phuc said that this would soon change, however, with bilateral agreements and WTO commitments requiring the sector to be opened to offshore investors.
During 2010-12, State holdings in all of Vinalines’ major subsidiaries would be reduced to less than 50 per cent, Phuc said.
