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UPDATE 1-Three banks pledge interest-free loans to prop up Vietnam Airlines

(Adds details on loans, share issuance plan and changes source)

HANOI, June 21 (Reuters) - Three Vietnamese banks have pledged to lend 4 trillion dong ($173.8 million) to Vietnam Airlines to help the troubled flag carrier weather the impact of the pandemic and avoid bankruptcy, state media reported on Monday.

Vietnam Maritime Commercial Joint Stock Bank, Saigon - Hanoi Commercial Joint Stock Bank and SeABank would make the interest-free loans this month and early next month, the Lao Dong newspaper cited the central bank as saying.

Vietnam Airlines did not immediately respond to a request for comment.

The report said a plan for Vietnam Airlines to issue new shares to its existing shareholders to raise funds would be ready by year-end.

The airline, which is 86% owned by the government, reported a net loss of 4.97 trillion dong in the first quarter.

State media last week cited the Ministry of Planning and Investment as saying the airline would likely make a net loss of 10 trillion dong in the first half of this year and was on the brink of bankruptcy.

Vietnam Airlines earlier this month said it would sell 11 Airbus A321 aircraft through an auction. ($1 = 23,015 dong) (Reporting by Khanh Vu; Editing by Martin Petty and Ed Davies)

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