Hanoi (VNS/VNA) - A process has begun to allow theVietnam Shipbuilding Industry Corporation (SBIC) to declare bankruptcy,according to Deputy Minister of Transport Nguyen Xuan Sang.

The Ministry of Transport (MoT) said the bankruptcy was, at this point, aninevitable conclusion and the ministry is now aiming for an overhaul of thecorporation's core businesses while trying to retain as many experiencedmanagers and workers as possible.

Established in 2013, SBIC was formed through the reorganisation andrestructuring of the Vinashin Group. At that time, its charter capital was over9.5 trillion VND (390 million USD). However, SBIC had to bear the debt burdenleft by Vinashin, totalling over 4 billion USD.

Meanwhile, the bankruptcy will allow profitable subsidiaries to thrive byfreeing them from their parent corporation's old and existing debt. A recentreport by the ministry said while the corporation's ship-building businesseshave consistently been able to turn a profit in the last few years, they werenot sufficient to meet financial obligations inherited from the Vinashin era.

Vinashin, officially known as the Vietnam Shipbuilding Industry Group, is aState-owned enterprise in Vietnam involved in shipbuilding, ship repair, andmaritime industries. Between the years 2000 and 2010, Vinashin faced financial difficultiesand a significant debt crisis due to mismanagement, cost overruns, and a lackof transparency.

Funds obtained from the liquidation of the company and assets will be utilisedaccording to bankruptcy laws, including debt repayment, salary payment, andsocial insurance for workers, remaining from the Vinashin period, according tothe MoT.

Earlier this week, the ministry conducted a full evaluation and review ofSBIC's businesses and subsidiaries across the country. The ministry has startedbuilding a detailed roadmap aimed at maximising capital and asset recoverywhile minimising the use of additional State budgets.

In a meeting with SBIC's managers, the deputy minister said the bankruptcyincludes the transfer of ownership of the corporation. Once completed, it willallow SBIC's member shipbuilding companies to enter a new phase, free from theburden of old debts, so they can have more proactive control in theirproduction and business activities, ensuring greater efficiency.

SBIC was asked to complete the personnel reorganisation, address difficulties,and coordinate with the Business Management Department under the Ministry ofTransport to facilitate the bankruptcy procedures for its member companies.

Regarding the corporation's existing workers, Sang said that the bankruptcy isaimed at creating conditions for business revival and restructuring activities.Therefore, regardless of the owner, there is still a significant need for anexperienced management team and labour force within the existing businesses.

Following the process, member units and SBIC will submit bankruptcy proceduresto the court. Once the court opens the case and declares bankruptcy, theliquidation of assets, obligations, and payment priorities will be carried outaccording to the court's ruling. During this process, actively operating unitswith existing contracts will continue their normal operations.

In an earlier development, the MoT sent a document to SBICrequesting a thorough assessment of the situation of each business, compilingdocuments, and developing specific plans for each enterprise. The affectedunits include the parent company SBIC, its subsidiaries (seven companies), and147 former Vinashin member businesses that have not completed restructuring./.