AFP - Nearly-bankrupt Vietnamese shipbuilder Vinashin has defaulted on a loan to international lenders, a report said Friday, in a move that could further damage the country's economic stability.
Investors and analysts fear the scandal at Vinashin, whose debts exceed four billion dollars, is symptomatic of wider problems at state-owned firms, and ratings agencies have cited its troubles in downgrading Vietnam's sovereign ratings.
The Wall Street Journal, quoting a person familiar with the matter, said Vinashin (Vietnam Shipbuilding Industry Group) did not meet a deadline earlier this week to pay the first 60 million dollar instalment on a 600 million dollar loan arranged by Credit Suisse in 2007.
However, the paper's source called it "positive" that the state-owned company was willing to pay interest.
Vinashin has agreed to meet creditors in mid-January to discuss repayment of the loan principal, the source said.
A foreign diplomat told AFP he had "heard of (the) offer to pay interest, but not of creditor concurrence".
Spokesmen for Vinashin and Credit Suisse both declined comment to AFP on the report, and a co-leader of the creditors' group did not immediately respond to an inquiry.
Company chairman Nguyen Ngoc Su was quoted in official media on Monday as saying the firm had no way to immediately make the payment and was "still waiting for the final answer" on a request to defer it for 12 months.
The problems at Vinashin and its possible effects on the wider economy revive memories of the crisis in Dubai last year when the emirate of Dubai asked for a six-month moratorium on debt owed by conglomerate Dubai World.
Dubai's economy was hammered after it was revealed the firm owed an estimated 59 billion dollars (39.3 billion euros) of the emirate's public debt of 80 billion, sending a shock through global financial circles.
Hanoi has said Vinashin must settle its own debts -- which total at least 86 trillion dong (4.4 billion dollars).
Despite those comments, speculation has grown that the government would step in to help the ailing firm.
On Wednesday a Vietnamese newspaper reported that Hanoi had granted tax concessions to Vinashin, after speculation authorities would find a way to help the firm meet its debt deadline.
Among the concessions, the state-owned firm will get a grace period until December 31, 2011 for paying its taxes, Tuoi Tre reported, citing the Ministry of Finance.
State-linked Tuoi Tre did not give the amount of tax involved or the period it was due for.
One foreign analyst said Wednesday he thought the tax concessions were the government's way of indirectly bailing out the firm amid concerns of wider economic impact from the Vinashin case.
Global ratings agency Standard & Poor's on Thursday lowered Vietnam's sovereign credit rating, the country's second downgrade by an international agency in recent days.
S&P raised concerns about Vietnam's banks as it lowered the long-term foreign currency sovereign credit rating to BB- from BB, while the local currency rating dropped to BB from BB+, with a negative outlook.
Bonds in all of these categories are considered speculative, or junk bonds.
The firm's credit analyst, Kim Eng Tan, told AFP troubles at Vinashin "contribute to the uncertainties affecting the banking sector" but were not by themselves a key factor in the downgrade.
On December 15 Moody's Investors Service downgraded Vietnam's government bond rating to B1 from Ba3, maintaining a negative outlook.
It cited the risk of a balance of payments crisis, rising inflation and the debts of Vinashin.
Moody's said a default on Vinashin's foreign obligations would likely damage the ability of the country to raise affordable foreign market financing for its still largely unmet infrastructure needs.
Official data on Friday showed rising food prices are expected to push Vietnam's inflation rate to more than nine percent this year, piling pressure on the country's leaders to restore economic stability.
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