The Vietnamese government said that it will revoke a USD 9.8 billion license for a steel project by Malaysia's Lion Group and troubled state ship builder Vinashin, a deal that some saw as long doomed.

The Ca Na project, which aimed to have had capacity to produce 14.42 million tonnes of crude steel per year, had already been delayed before Vietnamese Prime Minister Mr Nguyen Tan Dung approved a proposal to revoke the license.

Lion and debt choked Vinashin, which have operated a joint venture going back 50 years, received the investment license in September 2008 and were due to start construction in 2009 with the first phase of the mill completed this year.

A lawyer in Vietnam who declined to be identified said that "This cancellation was on the cards for some time. It was far too big. Even when Vinashin was riding high it was seen as too big. No one really believed it would happen."

Vinashin is being restructured by the government after it announced last summer that the overextended conglomerate that was nearly bankrupt under more than USD 4 billion in debt.

(Sourced from www.reuters.com)