On the brink of bankruptcy due to the Covid-19 pandemic, debt-ridden Vietnam Airlines expects to get 4 trillion dong ($ 173.6 million) in interest-free loans from three local banks.
Southeast Asia Commercial Equity Bank (SeABank), Vietnam Maritime Commercial Equity Bank (MSB) and Saigon-Hanoi Commercial Equity Bank (SHB) have agreed to provide the plan for rescue to the national carrier.
Banks and Vietnam Airlines are completing procedures and hope the loans will be disbursed by the end of June or early July, said Nguyen Tuan Anh, director of the credit department for economic sectors at the State Bank of Vietnam.
Shocked by the impact of the pandemic last year, the carrier requested 12 trillion dong ($ 520 million) in support from the Vietnamese government, including 4 trillion dong in refinancing loans. Last November, the National Assembly, the country’s legislative body, passed a resolution allowing the central bank to refinance itself and offer loan extensions of up to two times to banks that would lend Vietnam Airlines capital. to allow it to continue its operations.
In March, then Prime Minister Nguyen Xuan Phuc authorized the State Bank to grant refinancing loans totaling D4 trillion to commercial banks that would lend to the carrier.
Vietnam Airlines has been authorized to hold its annual general meeting of shareholders after June 30, 2021, a deadline under normal circumstances. According to sources familiar with the situation, the carrier should reveal at the general meeting its intention to add 8 trillion dong (double the agreed rescue plan) to its capital. The combined sum of 12 trillion dong was the amount the carrier requested last year.
Like the national carrier, Vietnamese private airlines VietJet and Bamboo Airways are also facing challenges as their financial resources are depleted as the pandemic is expected to extend globally. However, the government must start with funding solutions for the flag bearer.