Coal Industry to Accelerate Restructuring

 

Vinacomin has issued documents and directives to guide and direct the units to focus on promoting product sales, stabilizing production and income of workers on the basis of balancing business efficiency, enhancing recovery and improving product quality, reducing input costs for producers and reviewing investment cost. In particular, the Group has continued to balance and allocate 5 percent of the total cost for all units since the task assignment in early 2014 plans.

 

Regarding capital raising, short-term and medium-term capital is raised to guarantee payment for coal and bauxite and ammonium Nitrats projects with a reasonable interest rate. The sector signed a loan contract worth US$300 million with SMBC including NEXI insurance for Nhan Co Alumina Bauxite project, guaranteed by the Government. It has also successfully issued VND3,000 billion-worth bond in a period of 5 years for projects of coal and minerals at an interest rate of 9.8 percent in the first year and margin interest of the following year being 2.75 percent. The coal sector also maintains the rating of credit indices with two international prestigious organization Moody's and S&P (The Group's credit indices has been improved a step at a stable level B+).

 

Vinacomin is gradually improving the organization of the parent company, rearranged the organization of two-level member companies to turn into one-level ones and removed intermediate level to turn companies into Vinacomin's branches. The Group has also transformed 10 independent accounting subsidiaries into dependent accounting branches of parent company. The group continues to implement steps to capitalize 8 enterprises (Lam Dong Aluminum Limited Corporation has asked the Prime Minister to allow backward equitization progress until after 2015; instead Nhan Co Environment treatment company will get equitized), in which 3 enterprises have completed the transfer into joint-stock companies while 5 businesses have completed enterprise value appraisal.

 

Vinacomin has completed divestment of investment in financial sector (finished selling the entire company capital invested in TKV Finance Company into Bank VP), SHB bank, insurance and securities and obtained VND 1,600 billion. Particularly, investment in real estate infrastructure is being deployed to carry out the steps to finish divestments by 2015 (over VND 200 billion remaining). In particular, cooperation capital with Hai Ha Economic joint-stock company is worth VND 47.8 billion.