HCMC – Vietnam Airlines decided at an extraordinary shareholder meeting on December 29 to issue shares worth VND8 trillion (US$344.9 million) to its existing stakeholders to raise its charter capital.
The State Capital Investment Corporation would represent the Government, which owns 86% of the national flag carrier, to buy the shares.
With the share issuance, the owner’s equity of Vietnam Airlines would be nearly VND8.3 trillion by the end of 2020 and over VND8.2 trillion by the end of 2021. Its debt-to-equity ratio was expected to fall from 6.19 to 5.22 by late 2021.
The airline will use the proceeds from the share issuance to pay overdue debts and short- and long-term bank loans; it will not use the money for investment, procurement and other activities, which do not directly serve its operations.
At the meeting, the carrier also called on its shareholders to offer preferential loans so that the airline can accelerate its recovery.
As for the performance of Vietnam Airlines in 2020, its consolidated revenue reached VND42.5 trillion, including VND33 trillion from its parent company, exceeding their respective targets by VND1.9 trillion and VND448 billion.
It was projected to suffer a loss of VND14.4 trillion. Of the total, its parent company’s loss in 2020 was estimated at over VND12 trillion, VND2.42 trillion lower than the previous forecast.
The loss could further be narrowed by an addition of VND2.85 trillion after the firm completes procedures for depreciation adjustment and the allocation of funding for aircraft maintenance under the Government’s support program.
In 2020, the airlines operated 96,500 flights, carrying 14.23 million passengers and nearly 195,000 tons of cargo. It also organized more than 180 repatriation flights, bringing over 52,000 Vietnamese citizens back home from over 30 countries and territories.
In the 2021-2025 period, Vietnam Airlines will focus on its recovery, while continuing to push for the restructuring process.
According to the firm, Vietnam’s aviation sector is expected to recover faster than in other countries due to a high demand for tourism and trade in both domestic and foreign markets. With the Government’s support, Vietnam Airlines expected to report profits from 2023 and cut consolidated losses by 2025.
By Le Anh