Vietnam Airlines renews turnaround push with share issuance plans

After four straight years in the red, embattled Vietnam Airlines is looking to raise fresh funds to accelerate its turnaround even amid continued headwinds in costs and passenger traffic. "We're planning a private placement of new shares in the near future targeting a select group of investors," Chairman Dang Ngoc Hoa said during a recent shareholders meeting. Hoa said the plan awaits government approval. He did not disclose a timeline or the fundraising amount. The Vietnamese flag carrier's liabilities exceeded its assets in the first quarter of 2022. It is expected to face a negative equity of over 10t dong ($394m) at the end of this year. When asked at the June meeting when the carrier will resolve its excess debt, Hoa said the company hopes to escape from negative equity by the end of 2025. Vietnam's legislature on June 29 approved an extension of up to five years for the airline to repay 4t dong in state-backed loans. But lawmakers reportedly expressed harsh views of the state-owned carrier. "It should think about a fundamental solution to get out of the red," one legislator was quoted as saying. The airline's consolidated revenue rose roughly 30% last year to 93t dong, yet the company recorded its fourth straight year of net losses. Passengers groupwide increased 16% to over 24.1m, but the weak Vietnamese currency and rising fuel prices squeezed earnings. Vietnam Airlines logged its first net profit in 17 quarters in January-March. The results were credited to staff cuts, a reduction in equipment and other belt tightening. "Thanks to Vietnam Airlines' efforts, the operating situation is improving, and the most difficult time has passed," Hoa said.<br/>