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Three banks file lawsuit against Dung Quat ethanol project investor

The Saigon Times

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HCMC – PVCombank, OceanBank and Vietcombank have filed a lawsuit against Vietnam Central Biofuels JSC (BSR-BF), the investor of the Dung Quat ethanol project and a subsidiary of the Binh Son Refining and Petrochemical JSC (BSR).

The three banks wanted BSR-BF to pay overdue loans plus some VND1.37 trillion in interest, which was used to fund the Dung Quat ethanol project, according to the consolidated financial report of BSR in 2021 conducted by auditing firm Deloitte, the local media reported.

According to Deloitte, the People’s Court of Quang Ngai City of the province of the same name, where the ethanol project was developed, has been completing procedures to bring the lawsuit to court.

BSR-BF is one of the two subsidiaries of BSR reporting losses, and the Dung Quat ethanol project is one of the 12 poorly-performing projects of the Ministry of Industry and Trade.

In 2009, the Vietnam Oil and Gas Group assigned the project to BSR, and BSR later asked BSR-BF to be the investor of the project, which had a designed capacity of 100 million liters of ethanol per year and an investment of over US$80 million.

The plant, of which BSR owns 65.54%, was put into commercial operation on January 1, 2014, but has been suspended since April 2015.

On December 31, 2021, BSR-BF’s short-term debts exceeded its short-term asset value by VND1.33 trillion, and BSR-BF incurred a consecutive loss of over VND1.2 trillion and overdue loans of VND926 billion.

The possibility to resume the company’s operations depends on the restructuring of the Dung Quat ethanol project, the shareholders’ support and the company’s profits in the future.

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