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SINGAPORE—Vietnam
National Shipping Lines got a $130-million loan from
Citigroup Inc. to expand its fleet and upgrade its
ports, both companies said last week.
The
company, known as Vinalines, also plans to sell between
$500 million and $1 billion of foreign-currency bonds as
early as the second quarter of next year, chairman Duong
Chi Dung said in an interview in Hanoi last week. It
hired Credit Suisse Group to work with Vinalines in
obtaining a credit rating ahead of the proposed debt
sale, he said.
The loan
“will serve as a positive benchmark for Vinalines’s
future international financing,” Citigroup’s Citibank
N.A. unit said in a statement.
The
borrowing will help the state-owned port operator and
shipping service provider to double its fleet by 2010
and fund the construction and operation of major
seaports in
Vietnam,
chief executive officer Mai Van Phuc said. The
government has approved the expansion plan, he said.
Vinalines operates a cargo fleet that includes container
ships and oil tankers, as well as taking part in
businesses including port operations and providing
maritime services such as freight forwarding. Companies
in Vietnam, which began market-oriented reforms in 1986,
are increasingly turning to overseas debt markets to
fund expansion.
Vinalines currently has 160 vessels with a total loading
capacity of about 1.7 million tons, Phuc said.
“In
addition, Vinalines has been appointed as the main
investor in the construction and operation of all main
and large-scale seaports of Vietnam,” Phuc said in a
statement. “Therefore, Vinalines will need large capital
resources to support its development projects.”
Vinalines posted 2006 profit of 551 billion dong ($33.9
million) on sales of 11 trillion dong, according to the
Citibank statement. The company expects sales to reach
13 trillion dong this year, Phuc said, and Vinalines is
targeting to reach revenue of about 20 trillion dong by
2010 and 50 trillion dong by 2020.
While
focusing on creating “an integrated transport network”,
Vinalines also plans to “diversify its operations into
finance, banking, insurance, securities, electricity,
infrastructure construction, real estate and tourism,”
the Citibank statement said.
Last
month, Credit Suisse said it had been appointed by
Vinalines to arrange a loan of as much as $700 million.
“The
ability to raise funds is extremely important but it’s
equally important to know how to invest funds and invest
them well,” said Dominic Scriven, a director of Dragon
Capital in
Ho Chi Minh City, speaking at a conference on September 12. “If you
look at the corporate sector, you can see some very
aggressive strategies in play.”
Vietnam’s
economy will probably expand by more than 9 percent next
year, according to government forecasts. Standard &
Poor’s boosted Vietnam’s debt rating last year to BB,
two levels below investment grade. The nation’s debt is
rated one grade lower at Ba3 by Moody’s Investors
Service. (Bloomberg)
Lender
launches fund to build Indian ports
IN a
report datelined Mumbai, Citigroup Inc., partnering
Blackstone Group LP in an infrastructure fund in
India,
expects to raise $1 billion to build roads, ports and
utilities by next month, after a delay in setting up the
fund.
Chief
Executive Officer Charles Prince had said the New York
based-bank, Blackstone and Infrastructure Development
Finance Co. will raise $5 billion to invest in India by
last May. (Bloomberg) |
