Vietnam’s debt-collecting agency seizes skyscraper to cover $308 million loan

12:00 | 23/08/2017

The Saigon One Tower has been abandoned since the housing crisis hit the city in 2011.

The Saigon One Tower in downtown Ho Chi Minh City has remained unfinished since 2011. Photo by VnExpress/Quynh Tran

A skyscraper in downtown Saigon has been seized by the government’s asset management company as collateral for the VND7 trillion ($308 million) debt the investors owe.

The central bank said on Monday that the Vietnam Asset Management Company has taken over the Saigon One Tower following years of construction delays.

It is the first building to be seized under a decision established by the country’s legislators last June to deal with bad debt.

The 42-story tower, standing 195 meters (640 feet) tall along major thoroughfare Ton Duc Thang, was designed to be the third tallest building in the city.

Construction started in 2007 and was scheduled for completion in 2009, but the bare frame of over 6,700 square meters has been left untouched since 2011, the year the city’s housing market crashed.

A city spokesperson said last June that construction had ground to a halt due to conflicts between investors. He said the project has found a new investor and work will resume this year.

It is not immediately clear how this latest move will affect that plan.

The VND5 trillion ($220 million) project is just one of many delayed buildings in the southern city.

Work on a $100 million, 54-story jewelry center in the heart of the city has not moved since it was approved in 2004, while a 5,000 square-meter land lot allocated for a five-star hotel and apartment complex along Le Duan Street in District 1 has been used as a parking lot for years.

Data from the central bank show that bad debt in Vietnamese banks, mostly incurred due to a slowdown in the country’s real estate market in the early 2010s, had been cut to 2.46 percent of loans at the end of November 2016 from 4.83 percent in December 2014, a year after it set up the asset management institution to deal with toxic loans.

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