HÀ NỘI — Vietnam Airlines has been granted a significant extension on its debt repayment schedule, allowing the national carrier to restructure its financial obligations until the end of 2027. 

This move comes in response to the challenges posed by the COVID-19 pandemic and was formalised through Circular 16, recently issued by the Governor of the State Bank of Vietnam (SBV).

Effective from July 11, Circular 16 amends provisions from Circular 04/2021, which previously outlined the refinancing mechanisms for financial institutions loaning to Vietnam Airlines. 

The new guidelines facilitate an additional three-year period for restructuring the airline's debt, allowing for better management of repayment timelines while maintaining the classification of debts.

Under Article 12 of Circular 16, financial institutions are required to reorganise the repayment schedules for Vietnam Airlines' debts no later than December 31, 2027. This decision is contingent on the airline's ability to repay its obligations, as assessed by the lending institutions.

This extension is crucial for Vietnam Airlines, which has been navigating a complicated financial landscape. 

According to its first quarter financial report, the airline recorded a profit before tax of over VNĐ3.62 trillion (US$138.1 million), down 20 per cent from last year. The company's total assets have increased to nearly VNĐ59.84 trillion, with long-term assets making up a significant portion. — BIZHUB/VNS