A member of the management of the Phuoc Son Gold Co Ltd in central Quang Nam Province has assured its creditors that the company will pay its outstanding debts totaling over VND220 billion (US$10.38 million).

>> Indebted gold mining company besieged by creditors Pham Quang Ngu, the company’s deputy general director, made the promise on Friday amidst worries about whether the company (under the Besra Group – a Canadian-Australian joint venture) is capable of paying the huge debt amount, of which more than VND30 billion is trade payables and the rest is natural resource tax arrears.    “The company is facing financial difficulties, but this does not mean the company will not pay its debts. We will make debt payment provided that creditors stop besieging the company,” Ngu said.

As previously reported, hundreds of people, including traders and contractors, surrounded Phuoc Son on Thursday, requesting the company pay its outstanding debts. In a report sent to the Quang Nam Province People’s Committee on Thursday afternoon, the company wrote that the blockade by its creditors had paralyzed the company’s operations and that such a besiege is “illegal,” causing public disorder.  The People’s Committee of Phuoc Son District, where the company is located, had a meeting with the company’s management on Friday afternoon. The content of the meeting was not disclosed but Ngu said both sides have reached some agreements and Phuoc Son would resume work on Saturday, December 28. Ngu also rejected the comment that Phuoc Son’s fixed assets are not enough to cover its financial obligations. The Besra Group has invested about $100 million in the company, so it is unreasonable to allege that Phuoc Son is not able to pay its debts, Ngu said. Colonel Duong Tan Bo, head of the Investigation Police Department under the Quang Nam Province Police said local police are investigating the company’s financial situation as there are doubts about the company’s solvency. The group’s assets are enormous and there are commitments by the embassies of three countries in Vietnam in relation to the group’s financial obligations, so it is hard to say the group will leave Phuoc Son’s debts unpaid, Bo said. An official of the provincial People’s Committee also affirmed that these embassies have made such commitments to the Prime Minister, so the company’s debt situation “is not a fearful issue”. Besides Phuoc Son, Besra has also invested in another gold company in Quang Nam, which is  Bong Mieu Gold Co Ltd in Phu Ninh District. The total value of the two companies is millions of US dollars, the official said.