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Friday, July 19, 2024

VAMC aims to double charter capital

By N. Tan

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HCMC – The Vietnam Asset Management Company (VAMC) has asked the State Bank of Vietnam for approval to double its charter capital from the existing VND5 trillion to VND10 trillion.

VAMC said that its current charter capital appears modest when compared to the scale of bad debt prevalent in the market. This proposition aligns with the objectives outlined in Decision 1058, which aims at resolving bad debt issues from 2016 to 2020.

VAMC has also sought endorsement for the issuance of interest-bearing bonds to facilitate debt acquisition, in accordance with the provisions of Circular 32/2019 by the central bank. This strategic step would complement the provisions of Circular 19/2013, enabling VAMC to issue bonds, including specialized ones, for acquiring bad debt.

The proposed coupon rates for these bonds, including the specialized bonds, are set at 0%.

This initiative forms part of VAMC’s comprehensive strategy to manage distressed assets held by banks.

VAMC has acquired around VND13 trillion worth of bad debt at prevailing market prices since 2017, with over VND11 trillion already recovered, the Vietnam News Agency reported. This approach by the company has invigorated the secondary debt market and has spurred credit flows within the economy.

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