State-owned Vietnam Airlines has reversed its negative net worth thanks to a VND7.77 trillion (US$295 million) infusion of capital by the government.
The State Capital Investment Corporation (SCIC) said in a statement Tuesday that it had completed the purchase of additional Vietnam Airlines shares on Sep. 12, helping the airline “secure stable long-term cash flows, enhance its ability to meet debt obligations and possess resources for future fleet expansion.”
The capital injection allowed Vietnam Airlines to move out of negative shareholders’ equity, which, as its consolidated financial statements showed, was nearly VND3.1 trillion as of June 30 this year.
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A Vietnam Airlines Aicraft Seen and DA at International Airport. Photo by Vnexpress/Nguyen Dong |
SCIC’s newly acquired shares are part of the government-owned carrier’s issuance of 900 million new shares to existing shareholders to raise VND9 trillion to overcome the financial difficulties caused by the Covid-19 pandemic. Shareholders having 1,000 shares could apply for 406 new shares.
In September 2021 SCIC plowed in VND6.98 trillion to support Vietnam Airlines’ liquidity and maintain operations during the peak of the pandemic. It now owns a 47.09% stake in the airline.
Vietnam Airlines has rebounded from a slump starting early last year. In the first half of this year its revenues rose by 10% year-on-year to VND58.68 trillion, while profit before tax jumped 19.3% to VND6.68 trillion.
