VietNamNet Bridge – VAMC (Vietnam Asset Management Company) is now holding VND230 trillion worth of bad debt, including real estate which is used as collateral for bad debts it has purchased from commercial banks.
It is expected that from now to the end of 2017, VAMC will settle VND23-25 trillion worth of bad debt, or 10 percent of the amounts of bad debt it is holding.
With 70 percent of bad debt secured by real estate, roughly VND161 trillion dong worth of property being held by VAMC will be liquidated in the time to come.
In the latest move, VAMC has seized and plans to put Saigon One Tower building in district 1 in HCMC in auction. Saigon One Tower JSC, the developer of Saigon One Tower, failed to pay off its debts (principal and interest) of VND7 trillion ($308 million).
The AMCs under commercial banks have also repeatedly announced the sale of assets mortgaged for the loans which they cannot collect form clients.
|AMC has seized and plans to put Saigon One Tower building in district 1 in HCMC in auction. Saigon One Tower JSC, the developer of Saigon One Tower, failed to pay off its debts (principal and interest) of VND7 trillion ($308 million).|
Agribank’s AMC on September 19 put into auction for the fourth time the V-Ikor building developed by Viet Thuan Thanh, at the starting price of VND320 billion. However, the auction failed once again because there was no buyer.
Besides buildings, banks will auction many properties to serve debt collection. Agribank alone has dozens or hundreds of bad debt items that need to be resolved this way.
Analysts believe that the auctions will catch attention from foreign investors who want to join the Vietnamese real estate market. The purchase of the properties would allow them to obtain attractive projects in Vietnam in the quickest way and with reasonable prices.
However, contrary to predictions, foreign investors are hesitant to buy the properties related to debt because of the fear of complicated procedures.
The representative of EZ Land said an investor from Luxembourg doesn’t intend to buy properties related to debts.
He said EZ Land follows a principle that it only buys ‘clean land’ which can satisfy its requirements in terms of positions and design.
The investor, when learning about the Vietnamese real estate market some years ago, saw construction on hundreds of real estate projects suspended and could not find any project which had quality good enough for it to enter into a merger and acquisition deal
An expert said it would take several years to fulfill the complicated procedures to transfer ownership of properties.
In addition, new investors find it difficult to adjust the design and function of properties. They, for example, have to ask for permission from state management agencies to build one more storey to a building initially designed to have 20 stories.RELATED NEWS