Bianfishco’s huge debts put bankers on tenterhooks

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The total bank debts incurred by Bianfishco, the seafood company which has become the hottest topic of the discussions with its financial problems, have reached 1000 billion dong. The names of the nine banks which are the creditors of Bianfishco have been made public.

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The nine banks include the Bank for Investment and Development of Vietnam (BIDV (http://financeen.vietstock.vn/en/Stock/BIDV)), which lent 139.2 billion dong and 2.6 million dollars, An Binh Bank, which lent 63.5 billion dong and 10 million dollars, Can Tho-Hau Giang branch of development bank 310.2 billion dong, Asia Commercial Bank 61.3 billion dong.

Most of the banks said they have been put on tenterhooks after hearing about the problems with the debt payment capability of Bianfishco. A lot of loans have become overdue, while Bianfishco does not have money to pay.

Nguyen Thanh Toai, Deputy General Director of ACB (http://financeen.vietstock.vn/en/Stock/ACB), said that the unpaid debt of Bianfishco does not worry the bank much. “We are not too pessimistic about the debts incurred by Bianfishco. We are trying to collect debts by selling the assets mortgaged by Bianfishco for the loans,” Toai said.

Toai declined to give detailed information about the mortgaged assets and the value of the assets.
The same words were also released at the bank’s shareholders’ meeting held recently to calm down the shareholders who expressed their worries about Bianfishco’s debts.

Meanwhile, Tran Bich Quan, PR Manager of An Binh Bank, has only informed that the bank has been discussing the issue for the last some days--to find out the most feasible and reasonable solution to collect debt from the big debtor.

No official statements have been made, but it seems that the two bankers will not interested in the plans to rescue Bianfishco, such as freezing debts, injecting money in Bianfishco to become members of the board of directors.

Another banker said he has heard that a creditor suddenly refused to provide additional loans and take necessary measures to sell the collaterals for the loans. The bank has even blocked the company’s bank account.

“We are also considering doing this,” the banker said.

The thing which the public has been most interested in is who out of the nine banks would get the priority to get debt payment first, and how the debt payment priority order would be.

Dat Viet newspaper has quoted lawyers as saying that under the current laws, the laborers of the company would get the first priority to get salaries and relating allowances. After that, the money left by the bankrupted company would be used to clear unpaid taxes.

As for the bank debts, the loans with mortgaged assets would be settled first.

As such, there is no regulation to which lawyers can refer to say who it must prioritize to pay debts - banks or farmers. The total debt that Bianfishco is owing to banks and farmers has reached 1275 billion dong. Meanwhile, no on can say what bank of the nine banks would get the priority to get repayment.

A banker-creditor has revealed that one of the mortgaged assets is the company’s seafood processing factory.

In the past, borrowers could not mortgage the same assets at different banks for different loans. However, under the new regulations, one asset could be used as the collateral for many loans, provided that the total value of the loan is not higher than 70 percent of the assets’ value.

Besides BIDV (http://financeen.vietstock.vn/en/Stock/BIDV), ACB (http://financeen.vietstock.vn/en/Stock/ACB) and An Binh Bank, the other bankers-creditors of Bianfishco include the Vietnam-Thailand Bank, HCM (http://financeen.vietstock.vn/en/Stock/HCM) City Branch (3.5 million dollars), the Can Tho-Hau Giang branch of the development bank (310.2 billion dong), Habubank HCM (http://financeen.vietstock.vn/en/Stock/HCM) City branch (63.9 billion dong), Vietinbank Can Tho Branch (3 billion dong), Housing Development Bank Can Tho Branch (20 billion dong), the Saigon branch of the export bank (24 billion dong and 304,800 dollars).

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Can Tho-based Binh An Seafood JSC (http://financeen.vietstock.vn/en/Stock/JSC) (Bianfishco) plans to sell its fish processing plant to a finance investment corporation from the Netherlands to pay off debts to its fish providers in March, the company's CEO Tran Van Tri confirmed yesterday.

Tri, who replaced his wife as company CEO on February 23, said the company owes 45 local farmers VND261 billion (US$12.4 million) for tra fish they supplied.

Yesterday morning the company paid its 1,200 workers their February salaries, worth VND3 billion ($143,000), he added. Many company employees remain out of work because of materials shortages.

According to the CEO, the company's total properties were audited and said to be worth more than VND2,700 billion (US$128million), adding that the company would be able to balance its current debts.

Tri said his business had taken steps to pay off debts and bank loans and would not go bankrupt, since the interest on its bank loans and taxes would be paid fully and on time.
The company will work with banks to discuss its loans and propose its restructuring plan by Thursday. Bianfishco will also urge its counterparts to pay back their debts to the company in order to help rectify the situation.

Talking with a Viet Nam Fatherland Front representative yesterday, farmers were hopeful that they would be paid within the month as promised. They also expressed their wish that the company would resume its operations and develop.

Former CEO Pham Thi Dieu Hien is a member of the Front and went abroad for medical reasons in late February.

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Bianfishco’s General Director Tran Van Tri has stated that the seafood company has got a bail which would help the company revive. However, doubts still have been raised about the fate of Bianfishco.

At the press conference, Minh said he visited Pham Thi Dieu Hien, the wife of Tri, who was President and General Director of Bianfishco before she left Vietnam for Singapore for medical treatment, at a hospital in Fountain Valley in California state in the US.

“Hien told me that Bianfishco signed a contract with a big partner– Costco– a wholesale supermarket in the US– on exporting 1000 containers of tra fillet products, worth 100 million dollars. However, the company may have to break the contract due to the current difficulties,” Minh said.

“I know that this is a big contract, while Bianfishco has been well-known in the US. It would be a big waste if Bianfishco cannot fulfill the order,” he continued.“Therefore, after a meeting with the board of directors, I decided to inject 500 billion dong in Bianfishco to help the company resume production.”

With the new capital source, Bianfishco hopes to fulfill the order and make deliveries to the partner by the end of 2012.

Also according to Minh, of the sum of 500 billion dong poured into Bianfishco, only 30 percent is his company’s capital, while the remaining is the loan from the Bank for Investment and Development of Vietnam BIDV.

Tri has affirmed that Bianfishco has sold some assets to pay debts to An Binh Bank. Therefore, the bank has opened a new credit package to fund the fish collection from farmers.

As for the debts owing by Bianfishco to farmers, worth 40 billion dong, Tri has committed to pay a half of the sum by the end of May, and then, together with the Debt and Asset Trade Corporation (DATC) to pay up later.

Bianfishco has resumed its production after a period of interruption, having gathered 1200 workers. In order to churn out 1000 containers of tra fish fillet products, Bianfishco would need some 4000 workers and produce 450 tons of tra fish every day.

The information proves to be the good news not only for Bianfishco, but for the whole seafood industry, which has been in distress in the last many months.

However, local newspapers have later discovered that the company, which accepted to inject money to rescue Bianfishco, turns out to be a company with many problems.

Minh stated at the press conference that his company injects 150 billion dong in Bianfishco. However, the cash balance of the company by March 31, 2012 was 616 million dong only.

A finance report of the holding company showed that NTB (http://financeen.vietstock.vn/en/Stock/NTB) made a modest profit of 500 million dong in the first quarter of 2012. The company’s short term assets by March 31 had reached 1300 billion dong. However, of this amount, 1130 billion dong worth of assets (85 percent) are inventory items, which are not finished products, but just half finished ones.

The report on consolidated business result in 2011 showed that NTB (http://financeen.vietstock.vn/en/Stock/NTB) incurred the loss of 1.4 billion dong, mostly because of the 30 percent increase in the costs for the real estate trade and the costs for loan interests reaching 113 billion dong.


The company asked for the delay in dividend payment three times in 2010, and then decided to pay dividend in shares. NTB (http://financeen.vietstock.vn/en/Stock/NTB) shares were given warning on February 24, while the company had to pay the fine of 70 million dong due to the late finance report submission.