Why does VEC need to increase its charter capital to over 38,000 billion VND?

The additional investment in charter capital for the parent company - VEC - is necessary and urgent to help VEC access capital sources and create conditions for investing in expansion projects and new projects.

Regarding the proposal to increase the charter capital for the period 2024-2026 of the parent company, Vietnam Expressway Investment and Development Corporation (VEC) stated that in the three-year period (2021, 2022, 2023), the unit's total revenue exceeded VND 20,556 billion.

In the past, low charter capital has negatively impacted VEC's business operations and its access to credit from credit institutions and financial establishments (Photo: Ben Luc - Long Thanh Expressway, invested by VEC).

Specifically, net revenue reached over 12,000 billion VND, financial income reached nearly 5,300 billion VND, and other revenue reached over 3,251 billion VND. Total pre-tax profit reached over 3,469 billion VND; contributions to the State budget reached over 2,000 billion VND.

VEC's business performance, debt repayment capacity, and financial structure have improved positively, with the company receiving an A rating for the three years 2021, 2022, and 2023.

However, according to VEC, the current charter capital of the parent company - VEC - is very low, only 1,115 billion VND compared to the investment scale of approximately 108,865 billion VND.

Therefore, VEC faces difficulties in mobilizing capital to invest in expressway projects, especially for sources with low capital costs such as commercial loans and construction bonds, in order to ensure the completion of the 5-year business and investment development plan for the period 2021-2025, the Development Strategy to 2030, and the vision to 2035.

According to VEC, in its role as the State's representative investor in expressway projects, VEC has initially achieved its goal of serving the national expressway network development strategy by mobilizing approximately 108,865 billion VND from domestic and foreign sources to invest in 5 expressways with a total length of 540km.

The expressways invested in and put into operation by VEC have played a significant role in the socio-economic development of the country.

On the other hand, in its role of managing and operating state-assigned expressways, VEC has put into operation 490 km of 4 out of 5 expressway projects, accounting for approximately 27% of the total length of expressways in Vietnam today.

"The additional investment in charter capital for the parent company - VEC is necessary and urgent, in accordance with the policies/tasks assigned by the Central Party Committee, the National Assembly , and the Government, ensuring the completion of the enterprise's development plan and strategy."

"This also serves as a foundation and driving force enabling VEC to access capital and conditions for investing in expansion projects and new projects, contributing to the development of localities where the projects pass through, helping VEC develop in depth, and delivering the best quality products and services to customers," VEC affirmed.

Based on the analysis, VEC recommends that the Government report to the National Assembly to approve the investment plan to supplement the charter capital of the parent company - VEC - for the period 2024-2026 with 38,251 billion VND.

This capital includes: VND 1,562 billion from the Enterprise Development Investment Fund, and VND 36,689 billion from the state budget (public investment capital allocated to the Ministry of Transport for investment in 5 expressway projects with VEC as the investor and already disbursed).

Previously, in January 2025, acting on behalf of the Prime Minister, Minister of Finance Nguyen Van Thang signed and sent a document requesting the Chairman of the National Assembly and the Standing Committee of the National Assembly to consider adding to the agenda of the 9th extraordinary session of the 15th National Assembly the policy of supplementing charter capital for VEC for the period 2024-2026.

On the afternoon of February 10, 2025, the Standing Committee of the National Assembly met to discuss this issue.

Source: https://www.baogiaothong.vn/vi-sao-vec-can-tang-von-dieu-le-len-hon-38000-ty-dong-192250210190653543.htm