U.S banking group Citi signed loan and bond agreements Tuesday with three state-owned companies of Vietnam to support the development of Vietnam’s energy, transportation and infrastructure sectors.
The financing packages, signed with the witness of Vietnam’s President Nguyen Minh Triet and Citi Chairman Chuck Prince in New York, will help improve the financial capacity of the Electricity of Vietnam, Vietnam National Shipping Lines and Vietnam National Coal-Mineral Industries Group.
“The loan signed with EVN marks another step forward in Citi’s series of core banking solutions to EVN, which includes financing, cash management and online banking products,” a Citi statement said.
Pham Le Thanh, who is Chairman of EVN, said Vietnam’s electricity demand is growing at 16 per cent to 17 per cent a year, and EVN will have to mobilize US$3 billion a year to meet the country’s power investment.
“Citibank is one of the leading US banks that EVN has the first cooperation relationship with in areas such as payment services, telecom services, different forms of financing, foreign exchange and cash management, risk management and other banking services,” Thanh said
Vinacomin, Vietnam’s largest domestic coal and mining company, has selected Citi as advisor for its maiden local bond issuance.
Mr. Doan Van Kien, Chairman of Vinacomin said the agreement with Citi will enable Vinacomin to diversify financial sources to meet its energy investment plans in the coming years.
For Vinalines, the financing provided by Citi will help the firm to expand its fleet and develop port projects, including rebulding the Cai Lan port in North Vietnam.
Mai Van Phuc, CEO of Vinalines said that his company will double its fleet by 2010. In addition, Vinalines will be the main investor to rebuild and expand all main and large-scale seaports of Vietnam.
“Vinalines will need large capital resources to support its development projects. Among the resources that we are mobilizing, loans from international financial institutions such as Citi is essential to Vinalines’ growth,” Phuc said.
Jeffrey Shafer, Citi’s Vice Chairman, Global Banking, said, “As Vietnam’s economy is growing fast and is integrating into the global markets, state-owned companies will be looking to raise equity and debt financing offshore to increase their competitiveness. Moreover, SOEs will need to accelerate reform, update technologies and familiarize themselves with WTO practices, especially those in the heavily protected industries. Citi will be ready to bring our global expertise to Vietnam to help you in this important time of economic development.” (Citi press release)
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