Vietnam

Vietnam needs action not words

The restructuring of Vinashin’s defaulted loan highlights failures in the state sector, yet FDI continues to flow.

Vinashin, a Vietnamese state-run shipbuilding firm that collapsed in 2010 owing billions to domestic and foreign creditors, may be on the road to rehabilitation after Credit Suisse recently brokered a government-supported loan restructuring that has a good chance of winning acceptance from creditors.

The deal, which was revealed in February, could demonstrate to investors that Vietnam is serious about fixing its problems. “This is the best deal that creditors are likely to get,” said a person familiar with the negotiations. “If the terms are accepted, then it should also pave the way for improved investor confidence in Vietnam. The restructuring is likely to be completed by this year.”

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