VietNamNet Bridge – The information that Kenmark Group, which invests in the project on developing the Viet Hoa – Kenmark Industrial Zone (IZ), has escaped from Vietnam leaving a big debt of 50 million dollars, has stirred up the public. However, Kenmark’s representative has affirmed that Kenmark does not run away and that there is still solution to the problem.
Part 2: Kenmark group and the 50 million dollar debt
The 4-5 storey grandiose white buildings were the things that reporters could see first when they arrived in Hai Duong province. However, the buildings were quiet with no worker at the workshops. There were only several security guards and the three sealed-off entrance doors. These are all the things which have been built over the last year, since the IZ project was kicked off.
Kenmark does not run away
This is the affirmation of Hwang Ding Kuo, the legal representative of KID, the Taiwanese investor of the IZ project. The statement was then confirmed by Mai Van Chon, Head of the Hai Duong IZ Management Board and Nguyen Van Thang, Director of the Quang Ninh branch of the Saigon-Hanoi Bank.
“I fly to Vietnam every month to work with commercial banks and the Hai Duong IZ Management Board. Lately, on August 22, 2011, I had a working session with BIDV and other banks which gave the syndicated loan,” he said.
Chon said that before officially stopping the operation, KID paid salaries and fulfilled its duties to laborers. Besides, the investor paid the land leasing fee for 50 years already, worth 2.5 million dollars.
The investment certificate dated December 1, 2006 granted by the Hai Duong IZ Management Board shows that KID has the chartered capital of 29.529 million dollars and it committed to implement the project on developing the Viet Hoa – Kenmark IZ in Hai Duong which has the total investment capital of 1594 billion dong, or 98.430 million dollars.
In order to mobilize more capital for the project, KID signed a contract on a syndicated loan with BIDV (Thanh Do branch), SHB (Quang Ninh branch) and Habubank (Bac Ninh branch). The total value of the loan is 52.85 million dollars and 57.5 billion dong, which is equal to 70 percent of the total capital needed for the project.
Meanwhile, local newspapers reported that Kenmark has incurred the loss of 50 million dollars.
After getting the investment certificate, KID began building the infrastructure of the IZ. According to Chon, the investor has completed the construction of some infrastructure items such as roads, electricity system, water supply and drainage and waste treatment system as scheduled.
However, on June 20, 2010, KID sent a dispatch to local agencies, informing that it stopped the operation in the Viet Hoa – Kenmark IZ because KID met big difficulties in the global economic crisis. The information raised big worries to creditors, contractors and clients, who then sent petition to relevant agencies, saying that KID has fallen into insolvency and escaped from Vietnam.
Ways-out still exist
According to Bui Thi Mai, General Director of Habubank, an investor has expressed their intention to buy the whole Viet Hoa – Kenmark IZ. The investor has had working sessions with BIDV on the procedures to transfer projects and pay debts. It is expected that everything would be settled in October. Creditors, including Habubank, will have to thoroughly consider the financial capability of the new investor before deciding the methods of debt settlement.
Nguyen Van Le, General Director of SHB, said that SHB has requested BIDV, as the leading bank, to contact KID’s managers and Kenmark group to discuss the solutions which help settle the current problems. Banks and KID have reached an agreement about the methods of setting debts.
Malaysian Kris Sakti Holdings Group is now interested in the project, while involved parties are still discussing relating issues.
Hwang Ding Kuo has confirmed that the group is looking for the partners to transfer the IZ project. Of the Japanese, Chinese investors and the investors from the Middle East, who are interested in the project, one investor has proved that it can pay all the debts and resume production quickly.