Vietnam

Vietnam’s state asset management company, tasked with cleaning up bad loans, said it will acquire as much as 10 trillion dong ($474 million) of spoiled debt over the next two months as it considers possible foreign funding, Bloomberg reported. Vietnam Asset Management Co. will issue special bonds to about 10 banks in exchange for as much as 10 trillion dong of non-performing loans in the next two months, Chief Executive Officer Nguyen Huu Thuy said in an interview in Hanoi yesterday. The lenders will be able to use the bonds to secure funding from the central bank, he said.

Vietnam's central bank will cut three policy rates from Monday, as easing inflation gives the government room to lower companies' borrowing costs and get more money flowing through the economy, The Wall Street Journal reported. The 100 basis point cuts in the refinancing, rediscount and overnight rates on dong-denominated loans will make it cheaper for banks to borrow from the central bank, which should help increase credit growth.

Credit Suisse Group AG will accept a debt restructuring plan that Vietnam Shipbuilding Industry Group put to its creditors, helping to resolve negotiations surrounding a default that occurred more than two years ago, according to a person familiar with the matter. The Swiss lender sent a letter to about 20 other creditors of the Hanoi-based company, telling them it plans to accept the proposal and outlining the rationale for them to do the same, said the person, who asked not to be identified because the matter is private.

Until a few years ago, Vietnam was one of the world's hottest emerging markets. Now it faces an urgent task: fix a beleaguered banking system or watch its economy continue to slip behind faster-growing neighbors, The Wall Street Journal reported. Piles of bad loans following the financial crisis have dragged down growth in Vietnam and left banks weakened and reluctant to lend.

U.S. hedge fund Elliott Advisers LP is suing Vietnamese state-run shipbuilder Vinashin in the U.K. High Court, according to a filing seen by The Wall Street Journal. Vinashin defaulted on a $600 million syndicated loan last December, when the first repayment of $60 million was due. Other investors in the loan, which was arranged by Credit Suisse AG in 2007, include Dublin-based Depfa Bank PLC and Malayan Banking Bhd., as well as Credit Suisse.

The National Financial Monitoring Committee President has emphasized the need to restructure Vietnam’s commercial banking system if the country did not want to lag behind the rest of the world, VOV News reported. Vu Viet Ngoan told reporters on the sidelines of the ongoing National Assembly meeting in Hanoi that Vietnam’s financial system was rated as “weak” in the pre-crisis period and that the world was now rushing to restructure the global financial system in order to increase working capacity and reduce risk.

Frustration over Vietnamese state-run shipbuilder Vinashin's failure to repay loans it defaulted on last year is intensifying among creditors, potentially jeopardizing Vietnam's plans to draw more investment to improve its infrastructure and reduce the bottlenecks that threaten its growth, The Wall Street Journal reported. The problems at Vinashin point to the risks of investing in what, on the face of it, is one of the world's most attractive emerging markets.

Members of the Vietnamese government will not be punished for problems at a state-owned shipbuilder whose debts threatened the country's global financial reputation, a top official said Monday, Agence France-Presse reported. Deputy Prime Minister Nguyen Sinh Hung made the comments to the National Assembly, where some lawmakers last year said the government should be held accountable for the scandal at Vinashin (Vietnam Shipbuilding Industry Group).

Malaysian conglomerate The Lion Group has blamed problems at Vietnam's scandal-hit shipbuilder Vinashin for the failure of a multi-billion-dollar joint venture, Dow Jones Daily Bankruptcy Review reported on an Agence France-Presse story. The $9.8 billion project by state-owned Vietnam Shipbuilding Industry Group, or Vinashin, and Lion would have included a steel mill, power plants and a sea port in the southern Vietnamese province of Ninh Thuan. Vietnamese officials said last month that the project's investment license had been revoked because investors didn't fulfill their commitments.

Vietnam's leaders unveiled measures aimed at curbing soaring inflation rates Thursday, even as residents worried over electricity- and fuel-price increases that are sending energy costs as much as 24% higher, The Wall Street Journal reported. It's a time of spreading unease about the stability of this fast-growing economy. Communist-run Vietnam has one of Asia's worst inflation problems, with a consumer price index that hit a two-year high of 12.31% this month.