* Singapore issue to speed up firm's reform - chairman
* Bonds issued to local banks to cover domestic debts
* SOEs blamed for Vietnam's debt squeeze, sluggish growth
By Nguyen Phuong Linh
HANOI, Oct 10 Vietnam will offer $626 million of
government-guaranteed bonds at the Singapore Stock Exchange from
Friday to help state shipbuilder Vinashin repay its foreign
The bonds will be offered by the Finance Ministry-run Debt
and Asset Trading Corporation (DATC) and be for 12-year terms,
DATC said in a statement.
The move is one of the biggest steps by Vietnam towards
delivering on its "masterplan" of reforms to a once thriving
economy suffocated by high levels of toxic loans, blamed largely
on cash-sapping state-owned enterprises (SOEs) like unlisted
Vinashin, which ran up $4 billion in debt.
Like the many SOEs that were built in the mould of South
Korea's world-beating "Chaebol", Vinashin - Vietnam Shipbuilding
Industry Group - had easy access to credit, large sums of which
were squandered on non-core investments like property, or
siphoned off by corrupt officials.
Nine Vinashin executives were jailed last year for
mismanaging state resources and the firm almost failed in 2010.
The central bank has put the ratio of non-performing loans
in Vietnam's banking system at 6 percent or $7.8 billion, of
outstanding loans of $130 billion. Independent economists say
the real NPL figure is more likely to be three times higher.
About $64 billion, or half of Vietnam's outstanding loans,
were taken out by the 100 biggest of its SOEs, while tightened
lending by the troubled banks has led to a real estate market
freeze and closure of tens of thousands of smaller firms.
The government has vowed rigorous restructuring of the SOEs,
including whittling them down from the nearly 6,000 registered a
year ago. SOEs account for about a third of the economy.
"The government still considers shipbuilding as one of the
main industries in Vietnam, so the government guarantee of this
loan is normal," Pham Thanh Quang, DATC's general director, told
a news conference late on Thursday.
DATC would additionally soon issue 14 trillion dong ($663
million) of bonds to local banks to cover Vinashin's domestic
debts, on top of 11 trillion dong in bonds issued to lenders
last month, Quang said.
The foreign loan had been registered on the New York Stock
Exchange and would be issued on the Singapore bourse on Friday,
as global fund certificates guaranteed by Vietnam's communist
government, DATC said.
Vinashin's chairman, Nguyen Ngoc Su, said the firm was far
from finished: "It will affect strongly the restructuring of
other loans, quicken the reform process of the group ... create
good momentum for the group's development in the future."
(Writing by Martin Petty; Editing by Ron Askew)