Parkson Retail Asia Co., Ltd. (PRA), a 100% owner of Parkson Vietnam Co., Ltd., has just announced that it will file for voluntary bankruptcy with the Ho Chi Minh City court on April 28. PRA is a subsidiary of the retail group Parkson Holdings Bhd (Malaysia) with a 67.96% ownership ratio.
Parkson Holdings said Parkson Vietnam has a long history of operating at a loss in Vietnam. These losses have been exacerbated by the challenging business environment in recent years due to the consequences of the Covid-19 pandemic.
"In particular, the lack of support from Parkson Vietnam's landlords, such as no or insignificant rent reductions during the Covid-19 social distancing period, has adversely affected the company's finances," the group said in a filing to the Malaysian stock exchange.
Therefore, in the Group's assessment, it is not commercially feasible to continue operating in Vietnam and it is determined that filing for bankruptcy would be in the best interests of Parkson Vietnam. However, the bankruptcy proceedings must be approved by the regulatory authority in Vietnam.
Parkson used to be a popular shopping center for generations 7x and 8x (Photo: Parkson Saigontourist).
Parkson Vietnam's parent company said it will only be able to determine the financial impact of the voluntary bankruptcy on its financial statements ending December 31, 2023 after the bankruptcy proceedings are approved.
Under Vietnamese law, Parkson Vietnam is the entity that bears all legal responsibility and is not related to the parent company or other members of the system. Therefore, the maximum risk of the Malaysian retail group is limited to the capital contribution in Parkson Vietnam. In the audited financial report, PRA recorded a loss on the entire value of the capital contribution in Parkson Vietnam.
Parkson Vietnam Co., Ltd. was established in 2007, represented by Bernandette Chong Yin Wah. Parkson Retail Asia opened its first shopping mall in Vietnam in June 2005, named Parkson Saigon Tourist Plaza.
At its peak, this retail chain had 10 shopping malls in prime locations and was considered the standard for high-end shopping malls in Vietnam.
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