The fundamental solution for VNA is to issue more shares.

While the National Assembly was discussing, VNA's capitalization increased by 3 trillion VND.

On the afternoon of June 26, the National Assembly discussed the content of extending the recapitalization loan for Vietnam Airlines Corporation (VNA).

Delegates all agreed to support Vietnam Airlines and said that more fundamental solutions are needed to ensure VNA's sustainable development in the future.

Commenting on this content, delegate Tran Hoang Ngan (HCMC delegation) said that in 2020, due to the impact of the Covid-19 pandemic, especially in countries around the world such as China, the US, and Europe, it seriously affected international transportation, international tourism, and many airlines around the world fell into crisis.

Delegate Tran Hoang Ngan (Ho Chi Minh City delegation).

VNA's revenue has declined dramatically. In 2020, VNA lost 8,743 billion.

In this situation, VNA is likely to lose its ability to pay and may be delisted, affecting the State's capital participation in VNA (about 19 trillion VND).

At the 10th session, the 14th National Assembly agreed with the Government's proposal and allowed the State Bank to refinance and extend the loan no more than twice.

However, by 2021, the Covid-19 pandemic continued to develop complicatedly and caused serious consequences in Vietnam, VNA continued to suffer heavy losses of over 11,800 billion VND and in 2022, the loss continued to be 8,841 billion VND, although the plan was to lose only 35 billion and in 2023 the plan was expected to be profitable, but in the end, it continued to lose 4,789 billion.

Thus, after 4 years, VNA has lost over 32,000 billion. With this situation, if VNA is not given a debt extension, it will seriously affect its liquidity, its ability to maintain operations, and possibly lead to bankruptcy.

According to Mr. Ngan, to protect the national brand and especially the state capital at Vietnam Airlines, he proposed that the National Assembly extend the debt no more than 3 times.

However, to have a fundamental solution to ensure VNA's sustainable development in the coming time, delegate Tran Hoang Ngan suggested that the Government, the Capital Management Committee as well as Vietnam Airlines Corporation must restructure debt and reduce short-term debt.

This means continuing to create conditions for VNA to increase equity and issue more shares.

"Today and yesterday, when the group discussed the extension of recapitalization for VNA, VNA's stock price increased. Vietnam Airlines' capitalization increased by 3 trillion VND and now the total capitalization has reached 3 billion USD," Mr. Ngan said.

According to him, issuing shares at this time is very favorable. Right now, the price of Vietnam Airlines shares is 34,350 VND, which is 3 times higher than the par value.

Improved financial capacity, new foundation for implementing key projects

Agreeing on the plan to extend the repayment of the refinancing loan for VNA as proposed by the Government, delegate Dang Bich Ngoc (Hoa Binh delegation) said that this solution is only a short-term solution to help the Corporation temporarily have a stable cash flow and maintain production and business activities in the short term.

According to delegate Ngoc, solutions to restructure financial capital sources, increase charter capital, and divest capital from new member enterprises are fundamental solutions.

This solution will solve two goals for VNA, which are to have cash flow to handle the cash flow deficit and to have income to handle the problem of negative equity.

Delegate Dang Bich Ngoc (Hoa Binh delegation).

"When VNA's financial capacity is improved, the corporation will have long-term resources to facilitate key investment projects, creating a solid foundation for the business to develop sustainably," said delegate Ngoc, emphasizing the project related to Long Thanh International Airport.

However, the delegate of Hoa Binh delegation pointed out that according to the Government's report, the overall plan for early recovery and sustainable development of VNA, which was built from the beginning of 2021, has not yet been approved. According to the Government, the reason is due to many problems and inadequacies between a number of legal documents.

Therefore, delegates requested the Government to direct agencies to clarify legal problems and propose and recommend specific solutions to competent authorities, requesting the State Capital Management Committee at Enterprises and VNA to promptly complete the report for competent authorities to review and approve the overall project as a basis for implementation in 2024.

At the same time, she suggested that VNA continue to research and implement solutions, restructure the business organization, review all operational procedures of each stage to minimize costs while still ensuring flight safety and continue to improve the quality of aviation services to perform well in the coming time.

Source: https://www.baogiaothong.vn/dai-bieu-tran-hoang-ngan-giai-phap-can-co-cho-vietnam-airlines-la-phat-hanh-them-co-phieu-192240626185846168.htm