Vietnam restructures Vinashin away from container shipping

VIETNAMESE Shipbuilding Industry Group (Vinashin Group) has been forced to abandon its liner shipping activities, including Bien Dong Shipping and Vinashin Lines, under terms of government restructuring to be finalised by September.

Since its establishment in 2006, the group has grown to encompass up to 200 subsidiaries. Its predecessor, Vinashin, was established in 1996 through the consolidation of 20 shipbuilding-related companies. In 2005, the company received US$750 million from the first Vietnam sovereign bond issue.

"Much of the cash has been squandered on loss-making investments, many of which are unrelated to the group's core business of shipbuilding and ship repair. The financial difficulties that surfaced at Vinashin since 2008 had finally forced the government to step in, with orders for the company to re-focus on its shipyard," said a report by Alphaliner.

It noted that Vinashin's shipyards have been plagued by delivery delays due to poor management and shortage of cash. The deliveries of a number of container ships on order at Vinashin's yards were delayed by up to three years.

There are two containerships on order at Vinashin, the 1,730-TEU Vinashin Dragon and Vinashin Express which were originally planned for delivery in 2008 but have been delayed to late 2010 and 2011, respectively.

Vinashin's liner shipping interests currently comprise of 17 owned containerships, including the two 1,730-TEU units on order.

Alphaliner said the shipping interests of the Vinashin Group will be transferred to Vinalines (Vietnam National Shipping Lines) before the end of the third quarter following the directive of the Vietnamese Prime Minister issued in June. The Vietnamese Ministry of Transport controls both Vinashin and Vinalines. Apart from the container shipping subsidiaries, Vinashin will also give up its port investment in Dinh Vu (Haiphong) and transfer it to Vinalines.
(Source:www.schednet.com)