Vietnam tourism developer Andesco caught up in $3 mln debt row

An Giang Tourism Development JSC (Andesco) has refused to enter bankruptcy proceedings despite confirmed debt of nearly VND73 billion ($2.97 million) to TL Construction Investment & Design Consulting Ltd.

TL had signed 12 construction contracts at the Lam Vien Nui Cam tourist area with Andesco. Construction of the Cam Cable Car project began in 2019 and opened in 2021. However, TL claims that Andesco has repeatedly delayed payments and shown no willingness to resolve the debt, which stands at $2.97 million, according to the contracts signed between the two parties.

“Andesco has repeatedly refused to pay us $2.97 million, including late principal and interest, even though the contracts ended three years ago. We have sent a petition to the People's Court of An Giang province requesting bankruptcy proceedings against Andesco because the company is insolvent," said Do Phi Thuong, a representative of TL.

In court, Le Minh Hung, the legal representative for Andesco, confirmed that the company owed TL $3 million as of September 2022. Following two payments, the principal debt remains at $2.97 million. The company said the payment delay was due to the impacts of Covid-19.

Andesco was granted a certificate of establishment on March 28, 2009, with charter capital of VND140.78 billion ($5.72 million), headquartered at 911 Tran Hung Dao street, Binh Khanh ward, Long Xuyen city, An Giang province.

Theinvestor.vn contacted Le Minh Hung, and he said he was no longer with Andesco, so had comment.

According to meeting minutes issued on September 5 by the People's Court of An Giang province, Andesco still owes the state budget more than VND7 billion ($284,700). The company is also in debt to many other companies, such as Huu Duan Co., Ltd. with VND4 billion ($162,700), Asia Fish Oil JSC with VND109 million ($4,430), and BIDV Bank's Bac An Giang branch with VND280 billion ($11.4 million).

A reported 17 individuals have also lent VND91.7 billion ($3.72 million) to Andesco, while a further five individuals have contributed undisclosed amounts.

According to the People's Court of An Giang province, the payment of principal and interest to the lender was Andesco's responsibility. However, the 17 individual lenders did not agree with the request to open bankruptcy proceedings.

On September 7, 2023, the People's Court issued Decision No. 01/2023/QD-KMTTPS not to start bankruptcy procedures with Andesco. "There are grounds to prove that Andesco is not insolvent,” the ruling said.

Lawyer Tran Duc Phuong from the Ho Chi Minh City Lawyer Federation said that TL was right to file a request to open bankruptcy proceedings after Andesco had failed to meet its payment obligations after three months based on current regulations.

According to Phuong, the People's Court said that "Andesco is not insolvent", but this decision did not clarify "insolvency."

"Even though Andesco is still profitable and pays full principal and interest to individual lenders and banks, the decision to open bankruptcy procedures by TL is in accordance with Article 4 of the Bankruptcy Law. 2014 and Document No. 199/TANDTC-PC of the Supreme People's Court," Phuong commented.