Vinashin suffers cancellation of order

Vinashin recently said the group was facing a financial crunch as 15% of its contracts were cancelled due to the financial crisis. The group didn?t give any details on the value of the cancelled contracts. Vinashin said it is still a new company with limited investment capital, and a lack of funds was inevitable amid the economic downturn, especially when it had to keep the jobs of about 80,000 workers.

One of the projects, the 150,000 DWT floating oil storage depot and offloading unit FSO-5, has had its completion date rescheduled many times. It is now expected to be delivered to state-run PetroVietnam 15 months after the original deadline late last year.

A recent report of the National Assembly Standing Committee found that the shipbuilder had run up massive debts of VND3.8 trillion, or 91.4% of total debt owed by the country?s seven industrial groups.

To ease the financial situation, Vinashin has been allowed to issue government-guaranteed bonds to raise VND3 trillion ($168 million) for two of its subsidiaries.

Under a government decision, the sale of notes with maturities of between five and ten years will help finance the shipbuilder?s projects to expand the Pha Rung Shipyard in Hai Phong City and increase the capacity of Ha Long Shipbuilding Company in Quang Ninh Province.