Fearful of being delisted from the Ho Chi Minh City Stock Exchange because its accumulated losses have exceeded its charter capital, plunging it into negative equity for the first time, Vietnam Airlines (VN, Hanoi) has appealed to the government to give it temporary special status to maintain its listing.

The embattled 86% state-owned flag carrier’s stock remains listed on Viet Nam’s biggest bourse despite its unprecedented six consecutive quarters of heavy losses since the Covid-19 outbreak. Its accumulated loss of VND17.78 trillion dong (USD784 million) as of June 30 exceeds its charter capital - the sum contributed by all shareholders - by more than VND2.75 trillion (USD121 million).

According to the Law on Securities, if an enterprise experiences a total accumulated loss higher than its charter capital that is “actually contributed or in the audited financial statements of the year before the time of consideration,” it should automatically be delisted.

According to local broadcaster VTC News, Vietnam Airlines sent its petition to the prime minister during an online conference the government had organised with the business community on September 26. It argued for special status at the stock exchange so that its listing could be maintained “for a short period” while having negative equity, to give it time to recover.

It also appealed for international flights to resume soon to countries deemed Covid-safe and to apply vaccine passports to those who are fully vaccinated.

On September 24, Vietnam Airlines confirmed that it had issued 796.1 million shares to existing shareholders in a recent rights offering, boosting its charter capital by 56% to VND22.14 trillion (USD977 million) and out of negative territory. The number of shares sold was equivalent to 99.51% of the number that had been put up for sale.

As pre-agreed, the State Capital and Investment Corporation paid VND6.89 trillion (USD304 million) to buy 689.5 million shares. This meant that the two major shareholders, government entities the Commission for the Management of State Capital at Enterprises and the State Capital and Investment Corporation, saw their stakes change to 55.2% and 31.1%, respectively. Japan’s ANA Holdings opted out of the sale and saw its stake diminish from 8.77% to 5.62%. The VND8 trillion (USD353 million) offering was part of a VND12 trillion (USD530 million) support package that aims to return Vietnam Airlines to profit.