Six banks close Vietnamese road deal

The VND3.3 trillion BOT deal to expand the National Highway 51 reached financial close on Monday with VND2.4 trillion in debt funding from six local banks. The bank loan covers 72% of the deal with the winning consortium providing the remaining 28% in equity.

Vietnam’s VND3.3 trillion (€144 million; $174 million) build-operate-transfer (BOT) contract to expand the country’s National Highway 51 reached financial close on Monday backed by six local banks.

Highway 51: local
banks rally round
BOT deal

The deal will see the winning consortium widen the 73-kilometre road running through Dong Nai and Ba Ria-Vung Tau provinces, located in the southeast of the country, to eight lanes as well as refurbish 10 existing bridges and build an additional 12.

The six banks are the Bank for Investment and Development of Vietnam, the Vietnam Export Import Commercial Bank of Asia, the Asia Commercial Bank, the Vietnam Bank of Agriculture and Rural Development, the Vietnam Bank for Industry and Trade and the Dai A Commercial Bank provided a VND2.4 trillion debt loan for the deal.

That leaves the consortium – comprising local firms Vietnam Urban and Industrial Zone Development Investment Corporation, Song Da Corporation and BIDV – to provide the remainder of the project’s cost, putting the debt to equity ratio on the deal at roughly 72:28.