Vietnam Airlines incurred after-tax losses of nearly VND5 trillion in the first quarter of this year, surging over 90% year-on-year and the highest-ever losses recorded for a quarter, as the COVID-19 pandemic is emerging increasingly complicated.
The national flag carrier has issued its consolidated financial report for the quarter. Accordingly, its net revenue reached VND7.46 trillion, plunging 60% over the same period last year.
Its accumulated losses were over VND14.2 trillion, exceeding the firm's charter capital of more than VND8.9 trillion.
Under the Law on Securities, if enterprises' accumulated losses are higher than their charter capital, the listing of their shares on local bourses will be canceled. Vietnam Airlines may face the same fate if it does not increase its charter capital by an additional VND8 trillion as planned.
In addition to the losses, the air carrier is burdened with debts of nearly VND60 trillion, including VND12.69 trillion in short-term loans and VND21.64 trillion in long-term loans. However, its cash is over VND2 trillion.
Late last year, the airline announced it would issue shares worth VND8 trillion to its existing shareholders to raise its charter capital. The State Capital Investment Corporation would represent the Government, which owns 86% of the national flag carrier, to buy the shares.
With the share issuance, the owner’s equity of Vietnam Airlines would be nearly VND8.3 trillion by the end of 2020 and over VND8.2 trillion by the end of 2021. Its debt-to-equity ratio was expected to fall from 6.19 to 5.22 by late 2021.
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