9:02:13 AM | 10/15/2024
The Vietnam Debt and Asset Trading Corporation (DATC) has earned the titles of the “lifebuoy” and “savior” among the business community. Established in 2003, during a time when the concept of debt trading was still relatively new in Vietnam, DATC embarked on what many viewed as a risky venture in the realm of outstanding debt and asset management. Over the past two decades, DATC has not only weathered challenges but has also solidified its leadership in debt settlement and business restructuring, helping improve the financial health of businesses.
The DATC delegation, led by General Director Pham Manh Thuong, attend the 2024 IPAF Summit Meeting held in Hangzhou, China
Asserted persistence in bad debt handling and business restructuring
DATC was established by the Prime Minister on June 5, 2003, with an initial registered capital of VND2,000 billion, funded by the State budget. Officially commencing operations on January 1, 2004, DATC was recognized as a special State-owned enterprise (SOE). The formation of DATC contributed to advancing the economic innovation process, particularly enhancing SOE management and improving the government-business relationship. In the context of rising bad debts at SOEs, the establishment of DATC was both timely and essential.
In the early days of operation in a new industry in Vietnam, managing and trading debts posed a lot of challenges, as debt resolution was a particularly daunting task that many businesses preferred to avoid. DATC has focused on ensuring it is not seen as just a bad debt warehouse, but as the final entity in addressing bad debts. It is dedicated to sharing risks with all stakeholders, developing both fundamental and contextual solutions to debt, and establishing itself as a key player in the debt market as a buyer, seller, and manager. To achieve these goals, the staff members at DATC are committed to continuous learning and enhancing their professional skills, which helps them build strong relationships with customers and credibility with investors.
Over the past 20 years, DATC has steadily expanded in scale, capital, revenue, and operational performance. Key contributors to this growth include the leadership and governance of experienced, dedicated, and enterprising executives with expertise in finance. Former Board Chairman Pham Dinh Soan and former General Director Pham Phan Quang laid the foundation for DATC, while former General Director Pham Thanh Quang played an important role in integrating debt resolution with corporate restructuring. Additionally, other staff members like Ms. Nguyen Thi Luyen, former Director of the Debt & Asset Reception and Settlement Department, have devoted their whole life to DATC. In the context of economic volatility, current Board Chairman Le Hoang Hai has been pivotal in shaping future strategies and decisions for DATC. Most recently, DATC employees have embraced a culture of "devotion" and actively participated in social programs initiated by General Director Pham Manh Thuong.
DATC staff members actively participate in DATC Race 2024, an annual event that promotes health, encourages a positive lifestyle, and strengthens staff solidarity while fostering community engagement
By flexibly applying debt purchase options, DATC has assisted many struggling or distressed businesses in revitalizing their operations. Notable examples of companies that have experienced significant recoveries include Kon Tum Sugar (KTS), Son La Sugar (SLS), Sadico Can Tho (SDG), Vitaly (VTA), and Vinalines.
Marketing breakthroughs have propelled DATC from a passive to an active position. By implementing bold reforms - ranging from proactive engagement with credit institutions to establishing a centralized coordination point for debt management - DATC has cultivated substantial debt portfolios with many banks, including MBBank, ABBank, HDBank, MSB, VIB, and Agribank.
To share expertise in debt management and foster a strong support network among public asset management companies in the region and in the world, DATC has been an active participant in the IPAF International Conference as a founding member since 2013. Hosting events such as the 4th IPAF International Conference in 2018, themed “A Road to Strengthening Asia's Financial Safety Nets and Resolution Mechanisms,” and the 6th Training Workshop in 2019, focused on the “Operational and Legal Framework in Debt Trading and Handling Activities to Enhance Regional Financial Stability,” DATC’s contributions have consistently been highly appreciated.
Adding new motivation for DATC
“Whenever you are in trouble, there is always DATC” is a consistent slogan for every person at DATC. Our leadership feels very proud of the recognition and appreciation of the Government and the business community for DATC’s performance which is not only illustrated in our growing profits but, more importantly, in the significant impact we have on companies seeking solutions to financial challenges through debt trading and corporate restructuring,” DATC Chairman Le Hoang Hai emphasized.
“The current economic landscape with unpredictable fluctuations, ranging from global economic crisis, epidemics and inflation to bank interest rates and world political turmoil has posed a lot of difficulties to many enterprises. Without buyers for their debts, companies risk stagnation, contraction, or even bankruptcy. We recognize that no economy is devoid of bad debt. We do not expect to eliminate all bad debt; however, we must strive to maintain it at the lowest possible level. Bad debt can persist for many years, and DATC must serve as the ultimate safety net for these situations,” affirmed General Director Pham Manh Thuong.
DATC collaborates with the Office of the Ministry of Finance to visit and present gifts to students at Le Van Hien Primary and Secondary School in Son Duong district, Tuyen Quang province
Despite the Government's introduction of policies to encourage growth since its inception, the Vietnamese debt trading market remains modest in both breadth and depth when compared to international standards. Debt handling is typically unique, depending heavily on market fluctuations, the cooperation of debtors, especially commercial banks. This partly reflects the difficulty of DATC in scaling up operations due to limited financial resources and the debt handling needs of commercial banks. In addition, current debt trading plans are increasingly complex and have grate value, presenting significant challenges for DATC, demanding heightened innovation and creativity to adapt in the evolving context.
Therefore, the support of the Ministry of Finance, the State Bank of Vietnam, and related entities is essential for DATC to effectively fulfill its role, specifically in the following issues:
| As a business entity, DATC has achieved remarkable revenue growth. In the first six months of 2024, total revenue reached an impressive VND1,858.8 billion, representing a 324% increase compared to the same period in 2023. From 2004 to December 31, 2023, DATC had managed debts and excluded assets from 2,726 enterprises, with a total received value of VND6,287 billion. |
Studying and amending a draft decree to replace Decree 129/2020/ND-CP on functions, tasks and operations of DATC to provide an enabling legal corridor for operations in the coming period
Supporting DATC, proposing amendments and supplements to policies and mechanisms directly related to DATC's debt trading in the Law on Management and Investment of State Capital in Enterprises (replacing Law 69/2014/QH13) on settling divestment mechanisms, supplementing registered capital for DATC and legalizing its corporate restructuring.
These will provide valuable momentum and a solid foundation for DATC personnel, empowering them to work harder on the journey ahead.
By Bao Ngoc, Vietnam Business Forum
Vietnamese
