HANOI (Reuters) – Vietnam’s state-run carrier Vietnam Airlines faces the risk of running out of liquidity as early as July if it does not extend the deadline for refinancing and repaying government-guaranteed loans, the government said on Tuesday.
The airline received VND4 trillion ($157 million) in low-interest loans from commercial banks that the central bank refinanced at zero interest rates in 2021 but is running into financial difficulties due to the impact of the pandemic, the government said in a statement.
The statement added that refinancing activities, including the restructuring of non-core investments and the sale of new shares, have not been completed as they are pending regulatory approvals.
According to the government, Vietnam Airlines could face significant risks, litigation and reputational damage if the loan repayment is not extended.
“This is just one of the solutions to help Vietnam Airlines overcome its difficulties, but it is the most feasible and appropriate solution at present,” the government said.
The government recommended to lawmakers to grant an extension to loan repayments until Dec. 31, 2027 to give the airline time to complete its restructuring, according to the statement.
(1 dollar = 25,455.0000 VND)
(Reporting by Phuong Nguyen; Editing by Louise Heavens)