A Ho Chi Minh City-based skyscraper used by its developer as collateral for a massive loan which it eventually failed to repay has been put up for auction to clear the bad debt, the Vietnam Asset Management Company said Thursday.

Run by the State Bank of Vietnam, the debt firm, commonly known as VAMC, is responsible for purchasing nonperforming loans from local banks and handling them on the lenders’ behalf.

The ill-fated Saigon One Tower, a US$256 million building developed by Saigon M&C Real Estate JSC, was used as collateral for a VND7 trillion (US$308 million) loan its developer borrowed from a group of lenders.

As the debtor defaulted on the loan, the lenders sold the whopping bad debt to VAMC, which decided to seize the high-rise that was never completed in August 2017.

Seven months on, the VAMC announced on Thursday the tower is being auctioned for VND6.11 trillion ($269.16 million).

Companies that have successfully purchased property worth at least VND100 billion ($4.41 million) via auction are eligible to bid for the Saigon One Tower, according to VACM.

The Saigon One Tower (L), whose construction has been abandoned since 2011, is seen in Ho Chi Minh City. Photo: Tuoi Tre

Located at a ‘prime’ location near the Ton Duc Thang – Ham Nghi intersection in District 1, Ho Chi Minh City’s business center, Saigon One Tower is a complex of apartment, office and commercial components with a total area of nearly 15,000 square meters.

Construction started in 2007 and failed to meet its 2009 completion schedule. The unfinished building has been abandoned for years over the financial trouble of its developer.

The 42-story skyscraper has been dubbed the 'enemy of local photographers' for its hulking presence over the breathtaking skyline.

Saigon One Tower was the first collateral to be seized by VAMC under Resolution 42, which paved the way for the debt firm to handle bad loans.

The move has kick-started a rush for other banks to put collateral assets of bad debtors up for auction to resolve their nonperforming loans.