Hanoi Stock Exchange has again restricted trading in Vietravel Airlines (VU, Hue Phu Bai Int'l) parent Vietnam Travel & Marketing Transports JSC (Vietravel) to Friday sessions only, starting this week, as the company had sunk into negative equity.

The bourse took a similar step last December, punishing the tour operator for being late with the publication of its 2021 semi-annual report. That report, once published, revealed losses that had tripled year-on-year, which in turn prompted the auditor to issue a going concern warning.

On this occasion, according to a September 12 notice signed by Nguyễn Tuấn Anh, the exchange’s deputy director, data pointing to Vietravel’s negative equity had been sourced from its consolidated financial statements for the first six months of 2022. The restriction will be lifted, he added, once the company resolves the issues that led to the restriction.

Vietravel’s latest accounts show that by the end of the second quarter it had incurred negative equity of around VND104.3 billion dong (USD4.46 million), while its equity stood at just VND8 billion (USD342,000).

Assets amounted to over VND2.23 trillion (USD95.4 million) as of June 30, but the company was burdened with a debt pile of nearly VND2.34 trillion (USD99.9 million). It had close to VND65 billion (USD2.8 million) in cash, but this was down 42% from the start of this year.

Tourism in Viet Nam is recovering following a two-year Covid-inflicted hibernation, but Vietravel’s results remain poor despite doubling its revenue from the same period in 2021.

As a part of a reorganisation at Vietravel, in December 2021 the company decided to transfer a 55.58% stake in Vietravel Airlines to a newly incorporated unit, Vietravel Holdings JSC. As a result, the airline is no longer considered a subsidiary of the hitherto parent, allowing the tour operator to avoid also consolidating the airline’s losses. However, Vietravel Airlines is still an important affiliate of Vietravel, which continues to holds a 43.92% stake in the carrier.

Vietravel Airlines did not immediately respond to ch-aviation’s request for comment.