The Kuwait Petroleum International has warned of the risk of bankruptcy of the Vietnam refinery if a payment of $529 million to creditor banks due on May 27 is not secured. The company said in a letter to its partners in the refinery that “An urgent agreement must be found in critical financing issues and all capabilities should be used to avoid the occurrence of financial and legal consequences related to reputation.”
The company stated in its letter that the failure of the Vietnam Refinery Company to pay the installments to the banks may lead, as stipulated in the agreement with creditors, to a “basic default situation” from the beginning of June 2022, and this means that the Vietnam refinery will officially become bankrupt, and that the creditor banks may have the right to liquidate the financial guarantees from the partners, reports a local Arabic daily.
KPI has requested approval for the continuation of the RPA contract, through which it provided with the Japanese partner a $2 billion loan to the Vietnam Refinery, so that it could purchase crude oil from the Kuwait Petroleum Corporation.
In addition, the International Petroleum called on the partners to hold a meeting on May 10 to discuss the necessary financial solutions to ensure the continuation of the refinery’s business and to discuss with legal advisors and lenders, in light of the urgent need to find immediate solutions for the payment due at the end of May.
The daily has learned the KPI has sent a letter to its partners in the Vietnam Refinery Company, informing it that “it became clear that the refinery does not have sufficient liquidity to pay a premium to the creditor banks worth $529 million due on May 27.”
The company in its letter has warned of the risks of bankruptcy of the refinery and that the failure of the Vietnam Refinery Company to pay the installments to the banks may lead, as stipulated in the agreement with the lending banks, to a “fundamental event of default” from the beginning of June 2022, which means that the Vietnam Refinery Company will officially become insolvent, and the creditor banks have the right to liquidate the financial guarantees from the partners.
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