When founded, Thach Khe Iron Joint Stock Company (TIC) took charge of the major project Thach Khe Mine, with its shareholders’ excitement. However, its shareholders owing capital has caused difficulties for TIC; the public is now concerned about the capital withdraw and transfer by some of TIC’s shareholders. To study more about this matter, Vietnam Business Forum interviewed Mr Ho Duc Binh, Director of Thach Khe Iron Joint Stock Company.
Despite shareholders’ excitement when initiating the project, at present, TIC is suffering numerous complaints. How do you feel about this?
I myself feel very upset. However excited the people were at the beginning, common economic difficulties have exhausted shareholders and caused them to lose their confidence. The issues is that shareholders shouldn’t drag out the project’s capital, otherwise they have to withdraw to be replaced by others.
Do you suffer much pressure from the public?
Being the person taking main responsibility in TIC, pressure is unavoidable, as expectation is also a kind of pressure. To overcome, it is important to retain fortitude and calm, and consider what benefits the enterprise and people.
What does TIC expect from the Authority and people?
TIC hopes to receive support and sharing from the people and locality, who shouldn’t hurry but share with enterprise. Social welfare issues and land clearance will be addressed by TIC in the financial allowance.
Shareholders owing capital is the cause of TIC’s all difficulties; what are your thoughts on this?
At the moment, total project’s investment needs US$2 billion, in which shareholders’ actual capital accounts for only VND 2400 billion and the rest is bank loan. Since 2010, economic difficulty has had a great impact on shareholders, which caused them to owe capital. Regardless of paying bank interest, it is tough for TIC to keep shareholders’ capital balance interest (13-14 percent per year). It is hard for TIC to make a bank loan since there hasn’t been a shareholder with dominant power.
Many foreign investors are eyeing TIC, aren’t they?
Yes, Thach Khe iron mine draws much attention from foreign investors. One has shared that, if accepted to contribute capital, they will immediately spend VND 6,500 billion on land clearance compensation. However, since the Government determined Thach Khe iron mine as Vietnam’s and to serve Vietnamese benefits, we’ll together handle the obstacles.
So we need a measure to restructure shareholders, don’t we?
In the current context, in my opinion, the shareholders with adequate capacity and experience should be responsible if joining; otherwise, they should withdraw capital. Besides, it is necessary to withdraw the capital of those registering but not contributing capital; and then attract investment from external shareholders. The Authority should also issue a dispatch supporting shareholder restructuring.
We expect to have rights of selling raw ore expanded to have budget covering immediate activities and retaining the enterprise. Without capital, everything will be suspended.
Much public attention has been drawn to the idea that Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin) will take stakes. Can you comment on this?
It is the governmental orientation and the Corporation has also affirmed determination to take TIC’s stakes (about 51 percent of shares). However, taking over shares that were withdrawn capital must be conducted legally and requires agreement after negotiation. Vinacomin has also had meetings with shareholders to speed up that transferring procedure. Vinacomin takes TIC’s stakes, which will address the issue of lacking an actual leader for development.
Do you believe that TIC will overcome the challenge?
It can’t be done overnight, but I believe TIC will overcome the challenge. Despite great expectations from the authority and people, in the angle of mining, the key factor is time. With time, TIC will gain success!