Vietnam Airlines allowed to expand chartered capital by maximum $868 mln

The Vietnamese parliament on Saturday allowed national flag carrier Vietnam Airlines to increase its charter capital by a maximum of VND22,000 billion ($868 million) by offering shares to existing shareholders.

Per a resolution, the National Assembly agreed on the government’s proposed solutions to aid Vietnam Airlines recover from the impact of Covid-19 and develop sustainably.

Accordingly, the state-owned airline is allowed to offer additional shares to existing shareholders to increase its charter capital by a maximum of VND22,000 billion when it meets the provisions of the Securities Law.

In phase 1, the legislature allowed the Government to assign the State Capital Investment Corporation (SCIC) to buy Vietnam Airlines shares on behalf of the Government.

The carrier’s phase 1 capital hike will see an issuance worth VND9,000 billion ($355.1 million). Phase 2 will see a maximum issuance of VND13,000 billion.

The parliament also allowed Pacific Airlines, a low-cost airline subsidiary of Vietnam Airlines, to write off late tax payment fines and cancel delayed tax payments until December 31, 2024.

After this timeline, the tax authority will charge late payment interest and apply enforcement measures in accordance with regulations.

The State Audit needs to promptly make recommendations to competent agencies and Vietnam Airlines to avoid loss and waste of state support resources, as well as contribute to improving the airline’s business efficiency, the resolution reads.

Vietnam Airlines had been profitable for the third consecutive quarter with consolidated profit after tax reaching over VND860 billion ($33.93 million) in the third quarter.

However, due to the severe impact of the pandemic, the carrier still has negative equity of more than VND11,000 billion ($434 million). By the end of September, it had recorded accumulated losses of over VND35,200 billion ($1.39 billion).

At its 2024 AGM on July 21, Vietnam Airlines said it targeted VND4.52 trillion ($177.67 million) in 2024 pre-tax profit, marking a significant turnaround from the carrier's 2023 loss of VND5.36 trillion ($210.6 million) and nearly double the VND2.53 trillion it achieved in pre-pandemic 2019.

It also aimed for VND105.94 trillion ($4.16 billion) in consolidated revenue this year, up 13.6% year-on-year.

On the Ho Chi Minh Stock Exchange, Vietnam Airlines stock, HVN, closed Friday at VND27,900 ($1.1) per share.