As expected, though later than initially planned, Vietnam’s sovereign wealth fund, the State Capital Investment Corporation (SCIC), has bought into Vietnam Airlines’ rights offering amid the carrier’s still-accumulating losses due to Covid-19.

The SCIC paid VND6.89 trillion dong (USD302.2 million) to acquire 689.5 million shares, so that it now holds “at least 31.08% of Vietnam Airlines’ charter capital,” the fund said in a statement on September 13.

“Faced with the urgent request to remove difficulties for Vietnam Airlines Corporation due to the impact of the Covid-19 pandemic,” the fund said it was “performing the socio-political task” of investing in the shares.

Buying the shares “contributes to supplementing capital for production and business activities and improving Vietnam Airlines’ short-term solvency,” it elaborated, and soon the majority state-owned carrier will “complete its overall restructuring project to ensure adaptation to the new situation, overcome difficulties, recover quickly, and develop sustainably.”

In “performing the role of government investor,” the SCIC added that its development strategy for the period up to 2030 is to focus on promoting investment in industries and sectors “that need to be held by the state due to their spillover effects on the economy.”

The 86.19% government-owned airline currently faces an accumulated loss of up to VND17.78 trillion (USD781 million), exceeding its charter capital and plunging it into negative equity for the first time. Its second-largest shareholder is Japan’s ANA Holdings with 8.77%. As it is itself facing financial difficulties, the ANA - All Nippon Airways operator has sold its own rights to buy shares to Vietnam Airlines employees.

The VND8 trillion (USD350 million) share offering is part of a VND12 trillion (USD526 million) support package to return Vietnam Airlines to profit, a plan that also includes the sale of eleven of its A321-200s, the government allowing in vaccinated international visitors, and other measures.