Vietnam Airlines boosts its capital with $1 billion
Vietnam Airlines, the flag carrier of Vietnam, has issued additional shares to its current shareholders in order to raise the charter capital of the company. The airline announced that all shareholders contributed around $1 billion.
To increase the capital, Vietnam Airlines decided to issue additional shares to shareholders, including the government-owned Commission for the Management of State Capital at Enterprises, which holds the majority of 55% of the airline‘s stake, the State Capital and Investment Corporation, which owns around 31% of shares, and All Nippon Airways Group, which owns as much as 6% of Vietnam Airlines shares.
Vietnam Airlines caught public attention in June 2021, when local media revealed that the airline was on the verge of bankruptcy, and agreed to raise $347.8 million (VND8 trillion) to avoid the worst scenario and regain its position in the market. At the time, three local banks, including Vietnam Maritime Commercial Joint Stock Bank, Saigon – Hanoi Commercial Joint Stock Bank, and SeABank, agreed to lend the life-saving credit package of $174.8 million (VND4 trillion) to help Vietnam Airlines cope with the impact of the ongoing pandemic and prevent bankruptcy.
Initially, none of the banks had agreed to drop the financial lifeline or extend any existing credit line reportedly due to a high risk for the air carrier to step into legal actions and bankruptcy over its existing unpaid liabilities. The situation changed when Vietnam’s central bank-backed up the flag carrier. Although the banks have now agreed to support the cash-strapped airline, the credit sum might not be enough to cover the losses.
In the first quarter of 2021, Vietnam Airlines reported a net loss of 4.97 trillion dongs ($215.68 million), it also estimated that it would reach around $208.7 million (VND4.8 trillion) loss in H1 2021.
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