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Antaras
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VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 5:33 pm

The Ho Chi Minh City [Saigon] Stock Exchange (HoSE) has warned that the HVN stocks of Vietnam Airlines can be delisted as a result of Vietnamese regulations.

https://tuoitrenews.vn/news/business/20 ... 69001.html
The Ho Chi Minh City Stock Exchange (HoSE) has warned national flag carrier Vietnam Airlines of the brink of delisting if it continues reporting losses.

HoSE recently sent a notice to the national flag carrier, whose stock code is HVN, about the delisting risk.

According to the Law on Securities, shares of a public company may be delisted if the firm has loss-making operations for three consecutive years or the accumulated losses exceed the charter capital.

Vietnam Airlines risks delisting after suffering losses worth nearly VND11 trillion (US$467.5 million) and VND13 trillion ($552.6 million) in 2020 and 2021, respectively.

https://e.vnexpress.net/news/companies/ ... 08971.html
As of June 30, Vietnam Airlines' equity was a negative VND4.9 trillion ($209 million), its liabilities exceeding assets by VND36.435 trillion and its overdue payables at more than VND14.85 trillion.

The national carrier targeted revenues of VND45.2 trillion, and pre-tax losses of VND9.3 trillion for 2022.

In a statement sent to the HoSE it said it would restructure its portfolio and issue shares to raise its capital.

If VN cannot improve its financial situation, its HVN stock will eventually perish from the trading market.

Overall, VN is facing big troubles related to its financial situation. Recently, in the carrier's mid-year reviewed financial statement, the auditing firm Deloitte Vietnam has warned the carrier would find it difficult to sustain its operations with its short-term debt exceeding short-term assets by VND36,425 billion ($1.55 billion) and negative equity hitting VND4,900 billion ($209 million), and that the ability of VN to continue operating will depend on financial support from the government, extension of payment deadline for bank loans as well as payables to suppliers and lessors, the auditing firm says. To somehow save the situation, VN has suspended contracts to receive new A320neo and B78X airframes from the lessors, as well as trying to sell some old planes.

Not only VN but its low-cost subsidiary Pacific Airlines (BL, former Jetstar Pacific) is also in "severe conditions" and may have to cease operations. VN is still looking for a partner to invest in BL and is ready to sell as many shares in BL as necessary (even 98% entirely), but there are not many investors interested in BL due to its full-of-debt profile and the fact that both VN & BL are state-owned enterprises which face challenges from the Vietnamese regulations in order to be privatized. viewtopic.php?f=3&t=1474203

If the HVN stocks and BL's fate can't be saved, it's gonna be a big slap to this Vietnamese state-owned legacy national carrier. We don't know how much the Vietnamese Government wants to intervene and save VN (once more), but we can all realize that the Vietnam Airlines Group needs a meaningful restructuring to revive after the Covid-19 crisis. Potential assistance from its foreign major stakeholder ANA is also worth discussing.
 
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 6:20 pm

Antaras wrote:
…Vietnam Airlines Group needs a meaningful restructuring to revive after the Covid-19 crisis. Potential assistance from its foreign major stakeholder ANA is also worth discussing.


1. What was the financial condition of VN prior to 2020? Was it a viable entity?

2. How much ownership does ANA have in VN? Is it simply a financial investment or is it a JV? Does the investment put pressure on VN’s membership in SkyTeam?
 
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 8:51 pm

questions wrote:
Antaras wrote:
…Vietnam Airlines Group needs a meaningful restructuring to revive after the Covid-19 crisis. Potential assistance from its foreign major stakeholder ANA is also worth discussing.


1. What was the financial condition of VN prior to 2020? Was it a viable entity?

2. How much ownership does ANA have in VN? Is it simply a financial investment or is it a JV? Does the investment put pressure on VN’s membership in SkyTeam?


1. VN has recorded the all-time highest profit in the year of 2019, highlighted as one of the carriers which had the best business in ASEAN before Covid-19:
https://www.vietnamairlines.com/~/media ... nglish.pdf
https://e.vnexpress.net/news/business/c ... 35163.html
National flag carrier Vietnam Airlines estimates its consolidated pre-tax profit for 2019 at an all-time high of VND3.37 trillion ($146 million).
The figure also marks a 10 percent year-on-year increase, Vietnam Airlines said in a press release.

Its consolidated revenue is estimated at VND101.18 trillion ($4.39 billion) this year, up 2.2 percent year-on-year.

2. ANA is currently owning 5.62% of VN according to the most recent data, being the biggest stakeholder just after the Vietnamese State/Governmental entities and eventually being the biggest foreign one. It was nearly 9% prior to the pandemic but the Vietnamese Government's investments in VN (in the name of "Covid-19 rescue packs") have significantly decreased ANA's shares in the carrier.

I assume it's just a simple financial investment and it has no noticeable pressure on VN's SkyTeam membership since ANA's shares in VN are still relatively "minor" to have any meaningful influence. VN's partnerships are still mainly within the SkyTeam communities, and ANA is almost its only Star Alliance partner.
 
kriskim
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 9:07 pm

I can see why foreign airlines would be weary in investing in BL after QF’s investment, I think many airlines will stay away. If QF/JQ didn’t face so many roadblocks, Jetstar Pacific would of been a lot bigger and more profitable.
 
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 9:34 pm

It always amazed me that an airline the (relatively small) size of VN has a mixed long-haul fleet. 787-9, 787-10 and A350. Not to mention the A321neo and the recently delivered A320neo.
 
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 10:39 pm

Maybe Vietnam Airlines should consider axing their flight to SFO. That route is clearly prestige over profit; I believe the airline even said it themselves. I have no idea what kind of traffic they are aiming for with that flight; maybe someone could help chime in on that. (If it’s VFR, they should have flown to LAX instead.) It is to my understanding that Ho Chi Minh City is a pretty low-yielding market, perhaps too low-yielding to make a nonstop ultra-long-haul flight viable. Singapore and even Bangkok have a stronger, more developed economy, meaning more business traffic that produces higher yields (and Bangkok doesn’t even have any nonstop flights to the US). With that being said, their livery is gorgeous and one of my favorites, and I would really miss seeing it at SFO.
 
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 10:53 pm

Goodbye wrote:
It always amazed me that an airline the (relatively small) size of VN has a mixed long-haul fleet. 787-9, 787-10 and A350. Not to mention the A321neo and the recently delivered A320neo.


That is an interesting point. Makes one question if the decisions are strategy-led.
 
LCDFlight
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 10:57 pm

The airline business is generally speculative. If the capital ownership needs to be restructured, it is what it is. These are the risks. Vietnam has bright long term prospects.
 
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 11:16 pm

kriskim wrote:
I can see why foreign airlines would be weary in investing in BL after QF’s investment

VN is talking with local (Vietnamese) investors to sell BL stakes.
And VN is yet to success even with Viet investors.
 
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 11:20 pm

questions wrote:
Goodbye wrote:
It always amazed me that an airline the (relatively small) size of VN has a mixed long-haul fleet. 787-9, 787-10, and A350. Not to mention the A321neo and the recently delivered A320neo.


That is an interesting point. Makes one question if the decisions are strategy-led.

I would say "politics".

VN has a history of operating a mixed long-haul fleet. It used to operate a fleet of B777-200ER (PW & GE), A330-223, and a single A330-322 (for a short period of time) at once. VN used to order the B788 as direct A332 replacement but all of them were converted into B789, being an important part of the fleet now.
 
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 11:25 pm

Goodbye wrote:
the recently delivered A320neo.

All of them were actually delivered to VN. In fact, they all went to Volaris with Mexican reg.
 
MIflyer12
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Re: VN is having huge troubles, shares face delisting risk

Sun Sep 11, 2022 11:49 pm

It's all rather odd that the problem isn't with VN's shareholders or creditors, but with the listing agency. Would we accept NASDAQ telling Microsoft how to run its business?
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 12:16 am

MIflyer12 wrote:
It's all rather odd that the problem isn't with VN's shareholders or creditors, but with the listing agency. Would we accept NASDAQ telling Microsoft how to run its business?

Well, Vietnam is a heavy state-controlled economy so something like that can happen. Besides that, even though it seems like a weird intervenetion from the listing agency, the delisting warning is just simply a result of VN's disastrous performance (hmm your capital is going far below zero, and your debt & losses are getting bigger than the whole company)
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 1:35 am

Thanks for highlighting. What is the actual expectation going forward ? One would think if VN was important enough to Vietnam (certainly from a domestic perspective) then the Government should be injecting further equity again but it seems like they are dragging their feet and it will just all come again at the last minute.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 1:49 am

It seems the government doesn't know if it wants a more liberal economy or not. Having a state carrier but also competition with private airlines is a bit strange.

I flew on their A350 Paris-Hanoï-Paris in 2018 and it was very nice and cheap. COVID has surely a lot to do with the current state of affairs.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 1:57 am

SInGAPORE_AIR wrote:
Thanks for highlighting. What is the actual expectation going forward ? One would think if VN was important enough to Vietnam (certainly from a domestic perspective) then the Government should be injecting further equity again but it seems like they are dragging their feet and it will just all come again at the last minute.

The Vietnamese popular opinions oppose any support for VN, the last Covid injection was pretty controversial and I think that the Viet gov't does recognize that. In other words, the government knows that it needs to consider wisely for the next injection(s).

Another idea I would suggest is privatizing VN and decreasing the State's stakes in VN to at least 51% (currently more than 86%). Using private resources is always more acceptable in the opinions of the Vietnamese people.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 7:06 am

Antaras wrote:
Another idea I would suggest is privatizing VN and decreasing the State's stakes in VN to at least 51% (currently more than 86%). Using private resources is always more acceptable in the opinions of the Vietnamese people.


Without meaningful government support I don't think there is an attractive business case for such private equity, particularly from developed countries, to invest in VN and take on the substantial balance sheet issues you highlighted in the original post.

Also, it doesn't bode well for the next pandemic within the next 10 years if the government cannot follow through now with support and resurrection of the airline.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 9:20 am

MIflyer12 wrote:
It's all rather odd that the problem isn't with VN's shareholders or creditors, but with the listing agency. Would we accept NASDAQ telling Microsoft how to run its business?


To be honest, to a certain extent that does happen when you consider many major US companies/airlines/Boeing follow the priorities of what Wall Street wants from them.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 12:32 pm

SInGAPORE_AIR wrote:
Antaras wrote:
Another idea I would suggest is privatizing VN and decreasing the State's stakes in VN to at least 51% (currently more than 86%). Using private resources is always more acceptable in the opinions of the Vietnamese people.


Without meaningful government support I don't think there is an attractive business case for such private equity, particularly from developed countries, to invest in VN and take on the substantial balance sheet issues you highlighted in the original post.

Also, it doesn't bode well for the next pandemic within the next 10 years if the government cannot follow through now with support and resurrection of the airline.


The QF experience of investing in Jetstar Pacific doesn’t help, where execs were locked up in Vietnam due to fuel hedging losses and then I believe with significant pressure from the government QF was forced to continually sell down its stake before transferring ownership to VN, due to some rediculous branding concerns. Arrogance on QFs part yes, but equally not the same market conditions as are likely to be considered desirably by foreign investors.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 2:01 pm

MIflyer12 wrote:
It's all rather odd that the problem isn't with VN's shareholders or creditors, but with the listing agency. Would we accept NASDAQ telling Microsoft how to run its business?


Eh, well, the stock exchange is essentially an arm of the government of Viet Nam. The Ministry of Finance owns its parent company. And this behavior really isn't that different from how the NYSE functions; i.e. a security may be delisted from the NYSE if the share price falls below $1 for an extended period of time or if the company fails to file with the SEC in a timely fashion. A delisting threat isn't exactly telling the company how to do business since they can still function without a stock market listing; investors just can't trade shares as easily.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 11:20 pm

smi0006 wrote:
SInGAPORE_AIR wrote:
Antaras wrote:
Another idea I would suggest is privatizing VN and decreasing the State's stakes in VN to at least 51% (currently more than 86%). Using private resources is always more acceptable in the opinions of the Vietnamese people.


Without meaningful government support I don't think there is an attractive business case for such private equity, particularly from developed countries, to invest in VN and take on the substantial balance sheet issues you highlighted in the original post.

Also, it doesn't bode well for the next pandemic within the next 10 years if the government cannot follow through now with support and resurrection of the airline.


The QF experience of investing in Jetstar Pacific doesn’t help, where execs were locked up in Vietnam due to fuel hedging losses and then I believe with significant pressure from the government QF was forced to continually sell down its stake before transferring ownership to VN, due to some rediculous branding concerns. Arrogance on QFs part yes, but equally not the same market conditions as are likely to be considered desirably by foreign investors.

QF and VN were planning a major expansion for BL before Covid-19, with QF potentially rose its stakes to 34% in the carrier (also the maximum total ratio that foreign investors are allowed to hold in a Vietnamese airline). Jetstar Pacific has become a very promising LCC but then Covid came and messed up everything.
 
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Re: VN is having huge troubles, shares face delisting risk

Mon Sep 12, 2022 11:30 pm

smi0006 wrote:
Arrogance on QFs part yes, but equally not the same market conditions as are likely to be considered desirably by foreign investors.

It is worth mentioning that AirAsia has also failed to enter the Vietnamese market for some 4 times straight. It has lost to QF-JQ in the BL bidding, failed joint-venture with Vinashin, failed joint-venture with VietJet (ironically VJ is now becoming even bigger than VN in terms of market share), and failed joint-venture with Thiêm Minh Group (now launching its own KiteAir). After all of those failures, AK has totally given up its idea to create a Viet subsidiary.

Obviously, the Vietnamese market is not very friendly to foreign investors looking at all of the nuisances that Jetstar & AirAsia had to face. Even ANA's handshake with VN seems "faint" and I wouldn't be surprised if ANA will withdraw from its Vietnamese business, especially when every potential injection from the Vietnamese Gov't will significantly decrease its stakes & decisive power in VN.
 
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Re: VN is having huge troubles, shares face delisting risk

Tue Sep 13, 2022 1:45 am

From what I've read on this thread, it doesn't look like a good ending then. Government support looks distant and if this is not forthcoming then you're looking at a full re-nationalisation and / or collapse of VN. Not sure how bankruptcy laws work in Vietnam or whether that is even able to be contemplated for VN.
 
moa999
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Re: VN is having huge troubles, shares face delisting risk

Tue Sep 13, 2022 11:04 am

Also worth pointing out the issues with the 3rd carrier Bamboo Airways, and it's parent FLC Group.

Chairman/CEO under arrest for stock manipulation, IPO of Bamboo deferred, and FLCs share price in the toilet.
 
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Re: VN is having huge troubles, shares face delisting risk

Tue Sep 13, 2022 4:02 pm

moa999 wrote:
Also worth pointing out the issues with the 3rd carrier Bamboo Airways, and it's parent FLC Group.

Chairman/CEO under arrest for stock manipulation, IPO of Bamboo deferred, and FLCs share price in the toilet.

QH is splitting itself out of the FLC Group and I assume that it will be fine after the restructure.
 
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Re: VN is having huge troubles, shares face delisting risk

Tue Sep 13, 2022 5:17 pm

Antaras wrote:
SInGAPORE_AIR wrote:
Thanks for highlighting. What is the actual expectation going forward ? One would think if VN was important enough to Vietnam (certainly from a domestic perspective) then the Government should be injecting further equity again but it seems like they are dragging their feet and it will just all come again at the last minute.

The Vietnamese popular opinions oppose any support for VN, the last Covid injection was pretty controversial and I think that the Viet gov't does recognize that. In other words, the government knows that it needs to consider wisely for the next injection(s).

Another idea I would suggest is privatizing VN and decreasing the State's stakes in VN to at least 51% (currently more than 86%). Using private resources is always more acceptable in the opinions of the Vietnamese people.


There is conceptionally no point in privatizing a state enterprise in a so-called communist country. The point of a state enterprise in a communist country is above all to serve the needs of the people and to do so in a way that is affordable to the people both in terms of product and business expense. If VN does not make money, then the government should determine if the company is meeting the needs of the Vietnamese (including tour operators, hotels etc.) and if resources have been efficiently deployed. If not, then the state would make adjustments by looking at things like load factors and RASM to determine demand, look at the components of the carrier's CASM and then determine whether the state's resources should continue to be leveraged to subsidize the amount of flying VN is doing. Within a communist country, any given state enterprise may be "unprofitable" financially yet it may continue to serve the needs of the people and be effectively subsidized by other state enterprises that generate cash. Currently, the Vietnamese government is letting VN be run as though it were a capitalist business, but this has not saved it from hard times. Any state enterprise that is supposed to meet the needs of the people should never be put in such a precarious position, especially in light of the downstream money that may be generated from its continued operation. The Vietnamese government should therefore step in with state money, but it should do so only after an audit of the company's efficiency at meeting demand has been completed. I'm sure such an audit would find more than a few fingers in the pie as is the case at many nationalized carriers.
 
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Re: VN is having huge troubles, shares face delisting risk

Tue Sep 13, 2022 6:17 pm

usdcaguy wrote:
Antaras wrote:
SInGAPORE_AIR wrote:
Thanks for highlighting. What is the actual expectation going forward ? One would think if VN was important enough to Vietnam (certainly from a domestic perspective) then the Government should be injecting further equity again but it seems like they are dragging their feet and it will just all come again at the last minute.

The Vietnamese popular opinions oppose any support for VN, the last Covid injection was pretty controversial and I think that the Viet gov't does recognize that. In other words, the government knows that it needs to consider wisely for the next injection(s).

Another idea I would suggest is privatizing VN and decreasing the State's stakes in VN to at least 51% (currently more than 86%). Using private resources is always more acceptable in the opinions of the Vietnamese people.


There is conceptionally no point in privatizing a state enterprise in a so-called communist country. The point of a state enterprise in a communist country is above all to serve the needs of the people and to do so in a way that is affordable to the people both in terms of product and business expense. If VN does not make money, then the government should determine if the company is meeting the needs of the Vietnamese (including tour operators, hotels etc.) and if resources have been efficiently deployed. If not, then the state would make adjustments by looking at things like load factors and RASM to determine demand, look at the components of the carrier's CASM and then determine whether the state's resources should continue to be leveraged to subsidize the amount of flying VN is doing. Within a communist country, any given state enterprise may be "unprofitable" financially yet it may continue to serve the needs of the people and be effectively subsidized by other state enterprises that generate cash. Currently, the Vietnamese government is letting VN be run as though it were a capitalist business, but this has not saved it from hard times. Any state enterprise that is supposed to meet the needs of the people should never be put in such a precarious position, especially in light of the downstream money that may be generated from its continued operation. The Vietnamese government should therefore step in with state money, but it should do so only after an audit of the company's efficiency at meeting demand has been completed. I'm sure such an audit would find more than a few fingers in the pie as is the case at many nationalized carriers.

Not accurately "privatisation". With a hypothetical government-owned shares of 51%, VN would still technically a state-owned enterprise and the government would still have enough control of the carrier.

What we actually mean here is to significantly decrease the gov's share in VN as well as expect for some huge investments in VN from the private parties, which accurately called a "partial privatisation".

There was an actual plan to decrease the gov's shares in VN down to 51% in 2020, but it could not be completed. Indeed, the government's injection to save VN during the pandemic has once again rose the gov's shares in the carrier.

https://asia.nikkei.com/Business/Compan ... 0by%202020.
 
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 14, 2022 5:58 am

Are the problems with Vietnam Airlines and Bamboo Airways an opportunity for foreign carriers to launch new flights to HAN or SGN, and try to steal market share?
 
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Aesma
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 14, 2022 10:29 am

I'm not a financial wizard, but everyone knows investing in airlines is risky, so investing in an airline that is still controlled by a government you have no leverage over ? In a country with corruption problems ?
 
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 14, 2022 12:49 pm

Aesma wrote:
I'm not a financial wizard, but everyone knows investing in airlines is risky, so investing in an airline that is still controlled by a government you have no leverage over ? In a country with corruption problems ?

Of course that's not the perspectives of the local (Vietnamese) investors.
 
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 14, 2022 12:51 pm

planemanofnz wrote:
Are the problems with Vietnam Airlines and Bamboo Airways an opportunity for foreign carriers to launch new flights to HAN or SGN, and try to steal market share?

I see that foreign carriers are yet to grab that chance. In fact, depsites great issues, VN and QH are still successfully maintain their international services' frequency (except Bamboo when it had a 789 grounded in Australia for a month, disrupting its whole operations because it only has 3 B789 and that's some kinds of an unavoidable inconvenience)
 
MIflyer12
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 14, 2022 1:57 pm

usdcaguy wrote:
There is conceptionally no point in privatizing a state enterprise in a so-called communist country. The point of a state enterprise in a communist country is above all to serve the needs of the people and to do so in a way that is affordable to the people both in terms of product and business expense. If VN does not make money, then the government should determine if the company is meeting the needs of the Vietnamese (including tour operators, hotels etc.) and if resources have been efficiently deployed.


That really is the thing. Somebody from the Ministry of whatever needs to call up the listing agency and tell them to stop creating trouble. It's useless drama - competely artificial. Capitalist standards do not apply.
 
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Fri Sep 16, 2022 6:51 pm

Last week, the Vietnamese CAA just threatened to revoke the AOC of VN's LCC subsidiary Pacific Airlines due to disastrous financial performance, and asked for a report from the carrier before any further decision:

https://danviet.vn/pacific-airlines-tru ... 611313.htm
The Civil Aviation Authority of Vietnam (CAAV) has just issued a formal request to Pacific Airlines (BL) to report back to the Authority before August 10 as a result of this carrier having negative capital [due to debt] and cannot maintain the minimum capital according to the Decree 89 [setting the minimum capital of every airline must have according to the fleet size]. Therefore, the AOC of this airline will be canceled in accordance with the law if BL can not add the capital on time to satisfy the regulations.

According to BL's audited financial statements for 2020 and 2021, the airline's equity is negative 2,275 billion VND (-$96.2 million) and negative 4,583 billion VND (-$193.7 million), respectively. For two consecutive years, this airline failed to meet the minimum capital requirement of 600 billion VND (+$25.4 million) for an air transport business with a fleet of 11 to 30 aircraft [this is the mentioned Decree 89].

We all can believe that VN will survive in any way due to its importance to the Vietnamese State, however, things seem not as bright with its LCC subsidiary BL. CAAV has now basically stated that BL will now have to (likely) stop its operations at any time in the very near future, and even when VN has stated in the above report that it is talking with at least 3 investors with "positive signals" to restructure BL, we are yet to know if VN and the investor(s) will successfully save a carrier which was once a Jetstar subsidiary before the moment when the Vietnamese Authorities will effectively terminate BL's fate, or before a theoretical fall of the entire Vietnam Airlines Group.

Ironically, the current CEO of Vietnam Airlines was the CEO of Jetstar Pacific during its darkest day. And even when his management contributed to BL's very long loss-making era, he was promoted to become the CEO of the parent carrier VN and now...well, this thread exists.
 
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Re: VN is having huge troubles, shares face delisting risk

Fri Sep 16, 2022 7:29 pm

In case BL's operations actually get suspended, it will predictably cause chaos in the Vietnamese aviation market. According to the most recent data report from CAAV, last week (Sept. 7th to 13th) BL operated 285 flights with an OTP rate of 94%. That number of flights is indeed very small compared with Bamboo (1072), VN (2020), or VJ (2256), but still enough to make widespread disruption across the VN Group and the entire market. In the worst-case scenario, VN may try to move all pax to be transported under flights with the VN code (which it has done with several BL-branded flights but entirely flying under the VN code), and it may even choose to merge a major part of BL's fleet to continue's the group's operations & save the most BL pax as many as possible. But of course, in the short-term, any effort wouldn't be able to perfectly deal with any convenience, and it is potentially the biggest shock in the history that the Viet aviation market may suffer.

Stormy days are coming, all things are depending on VN's lobbying capability with the authorities as well as any timely intervention from the investors.

P/s: a quick check on fr24 and I can confirm that all BL flights are being operated under the VN/PIC codes (IATA code of Vietnam Airlines and ICAO code of Pacific Airlines; still BL-branded aircraft), and 6000-ish flight numbers that are not conflicting with any VN's "authentic" scheduled operations. VN may have already seen the loopholes and is ready for the scenario that BL's AOC will be suspended and VN has to handle most of BL's activities. I don't know how prepared VN's marketing team is in order to deal with this scenario with flights marketed under the "Pacific Airlines" brand.
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Tue Sep 27, 2022 9:32 pm

https://zingnews.vn/hanh-khach-keu-viet ... 57474.html

As expected, Vietnamese pax complained that marketing all BL flights under the VN code is causing confusion, making them think that they are flying the full-service VN but in fact, unintentionally booked a BL ticket. There are considerable differences between the services provided by VN vs. BL, but the prices were not much different, and seems like the customers are not so happy.

Besides that, VN confirmed that it wants to divest from BL to enhance the financial situation of the entire parent group. In other words, VN is selling BL to get some more cash and preserve its listing rights.
Vietnam Airlines is trying to withdraw its capital from Pacific Airlines to save more than 2.2 billion of its HVN shares not being delisted on HoSE. If it finds investors to acquire BL, VN will have more financial income as well as cash flow. However, the divestment from this low-cost airline is facing a conflict in the process between legal documents, even though there are 3 investors who already want to participate in the deal.

Expecting some big deals going with the VN Group in the near future. Also, no one has known where will VASCO go after the Group retired all of the ATR-72s.
 
kimshep
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 28, 2022 7:19 am

MIflyer12 wrote:
It's all rather odd that the problem isn't with VN's shareholders or creditors, but with the listing agency. Would we accept NASDAQ telling Microsoft how to run its business?


I'm sorry, but the answer is clearly YES.

You only need to look - for example - at the cannabis stocks listed on the NASDAQ and DOW boards in the USA. Both exchanges have the ability to direct companies and their policies when stock prices fall below a certain agreed listing value (usually, if a stock falls below a token value USD $1.00 per share). The exchanges have all sorts of regulatory powers including ordering a delisting, a recapitalisation of a company's stock via a consolidation or split / reverse split or even authorising a directed capital raising, just to name a few. These policy directions often result in mergers, takeovers or moves to the Chapter 11 or 7 rides. Doesn't that remind you of the phrase 'directing policy' on a commercial entity by an external body ?

It happens fairly regularly. And it is not just restricted to small cap stocks. Let's face it - in this instance, its a capitalist example. and unlike the VN / Government owned stock exchange, the US example I mention is not a Government owned body.
 
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Re: VN is having huge troubles, shares face delisting risk

Wed Sep 28, 2022 2:56 pm

Thanks for the updates Antaras
 
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Antaras
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Re: VN is having huge troubles, shares face delisting risk

Fri Oct 14, 2022 5:41 pm

VN is now having some plans...
https://cafebiz.vn/vietnam-airlines-gia ... 028401.chn

- It will sell a total number of 32 airframes including 26 [twenty-six] of its A321ceo (-231). Note that VN is only commissioning 48 A321ceo (which is still a significant number itself), this means this Vietnamese carrier is selling more than half of its A321ceo fleet that is "for extra income and to be replaced by newer airframes for better efficiency". The delivered 20 A321neo and a deal to lease not-less-than 5 A320neo can be a sensical 1:1 replacement for those sold airframes.
Besides that, VN is also selling all of the 6 ATR-72 that it owns, once again there are already multiple a.net threads mentioning that VN has tried to sell them for years but no one is interested in those...
- It will SnLB twelve narrowbodies (likely not the ones mentioned above) and a pair of spare engines.

In other words, VN is planning a mass retirement for its fleet, probably the biggest one in its history. VN's A321ceo are all in good shape (oldest one is only 16 y/o), they will easily find their new home and being a meaningful "supply" for the P2F market.
 
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Re: VN is having huge troubles, shares face delisting risk

Sat Oct 15, 2022 1:35 am

Thanks for the update. Looks like a strategy of trying to shrink to profitability. Big capacity loss too.
 
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Re: VN is having huge troubles, shares face delisting risk

Sat Oct 15, 2022 7:45 pm

SInGAPORE_AIR wrote:
Thanks for the update. Looks like a strategy of trying to shrink to profitability. Big capacity loss too.

VN simply just received all of its twenty A321neo by late 2019 which means just before Covid, so VN is basically coming back to its pre-Covid (2018-2019) size, not a very considerable shrink I assume.
Besides that, the ATR-72 is likely to be replaced by a new fleet with noticably bigger capacity, so this is also not a shrink in the regional market as well. It needs something to compete with Bamboo's fleet of E190.

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