Coffee processor Thai Hoa Group (THV) denied that it was facing bankruptcy and signed distribution contracts with two Chinese partners on Tuesday.
“Our company has been actively working with banks to restructure our capital,” THV chair Nguyen Van An told the online newspaper Thi truong Vietnam (Vietnam Market).
Our cooperation with the Chinese counterparts was not merely a move to soothe investor concerns, An added.
“They are long-standing partners and willing to help when we face difficulties,” he said. “But we have to overcome them on our own.”
Under the contracts, THV would import 5,000 tonnes of Arabica coffee from the Chinese companies and export 1,000 tonnes of instant coffee and 10,000 tonnes of Robusta coffee to them.
Meanwhile, Agribank, Maritime Bank and the Vietnam Development Bank have already supported the company’s capital restructuring. Current debts worth 198 billion dong (US$9.4 million) owed to Vietcombank would be serviced through the Debt and Asset Trading Corporation.
An hoped his company could resume normal operations by September.
THV earlier restructured its assets by selling 99 per cent of a project in northern Dien Bien Province and 51 per cent of a project in Laos to Maritime Bank. The company maintains facilities in Lam Dong, Quang Tri, Son La and Dak Lak provinces with a total capacity of 300,000 tonnes of processed coffee per year.
Haphazard investment in dozens of projects around the country failed to generate cash flows and put THV under huge financial pressure. Last year, it posted a record loss of 280 billion dong ($13 million), and outstanding short-term debt reached 1.8 trillion dong ($85.7 million), against a charter capital of just 378 billion dong ($18 million).