Vietnam’s NSRP faces risks of shutting down amid financial strains
This is not the first time NSRP faces production stoppage threats due to financial issues. In February 2022, the company actually slashed operating rates substantially for a period of about a month due to tight cashflow
Nghi Son Refining and Petrochemical Company Limited (NSRP) has reportedly submitted an urgent report to the Minister of Industry and Trade pleading intervention as the company faces heightened risks of production stoppage due to cashflow issues after failing to reach another financial restructuring agreement with key investor - PetroVietnam (PVN).
The agreement supposedly defers NSRP’s obligation to service two scheduled loan repayment to its lenders, one in May 2023 amounting to $375 million and an additional $277 million in November 2023. A cashflow report showed that failing to reach the agreement would strip NSRP of the ability to repay the loans while having sufficient funds to support day-to-day operations.
The lenders argued that the current financial restructuring package, which was signed in 2022, is indeed sufficient, which includes the extension of debt payment of nearly $2 billion and the extension of the loan term by 3.5 years, not to mention nearly $1 billion of principal grace. Therefore, NSRP’s demand to implement the restructuring agreement without legal binding is unreasonable, outside of the authority of PVN, and needed approval from higher authorities.
NSRP operates a 200,000 barrels per day refinery in the northern part of Central Vietnam. At the same complex, the company also owns a 370,000 tons/year polypropylene (PP) plant.
This is not the first time NSRP faces production stoppage threats due to financial issues. In February 2022, the company actually slashed operating rates substantially for a period of about a month due to tight cashflow while negotiating for a better loan repayment term with lenders.