Vietnamese steel and real estate company Hoa Phat Group Joint Stock Co. plans to borrow VND 637.5 billion ($37 million) from Vietnam's second biggest bank, Bank for Investment & Development of Vietnam (BIDV), in order to build a steel plant.
The plant, with a designed annual production capacity of 320,000 mt and to be based in the northern province of Hai Duong, will require an investment of VND 2.2 trillion ($126.22 million).
The lender is expected to charge around three percent above its deposit rates for the three and a half year loan.
The State Bank of Vietnam on January 23, 2009 cut its benchmark interest rate for the sixth time since October 2008, reducing it to 7.0 percent from 8.5 percent, and has asked banks to spur lending in an attempt to avert an economic slowdown. The Vietnamese economy expanded 6.2 percent last year, its slowest pace since 1999.
In 2008, BIDV lent Hoa Phat VND 510 billion.