Prime Minister Nguyen Tan Dung has directed ministries, sectors, as well as State-owned groups and corporations to complete the withdrawal of their capital from non-core businesses by this year end.

Bui Van Dung, head of the Enterprises' Reform and Development Department of Central Institute for Economic Management, told Vietnam News Agency about various ways to meet the target for this year.

The Government had recently announced some measures for promoting the restructuring of state-owned enterprises (SOEs), including the sale of share lots for enhancing the withdrawal of state capital from enterprises in the non-core business sector. How will the sale of share lots affect the withdrawal of state capital?

Bui Van Dung

Over a period of time, the withdrawal has been implemented under general regulations, and the shares of equitised enterprises have been sold on stock exchanges based on volumes that suited customers' demand and market rules.

However, to promote the withdrawal of capital despite large potential investors wanting to buy a huge volume of shares of enterprises, the sale of share lots is necessary to meet those investors' demands.

I think that is a suitable solution to enhancing the withdrawal of state-owned groups and corporations' capital from non-core businesses. The solution will create favourable conditions for the supply-demand balance.

To ensure efficiency in withdrawing State capital, seeking strategic investors is very important. What are the challenges in seeking strategic investors?

According to regulations under Decree 59/2011/ND-CP on converting state-owned enterprises into joint stock companies, strategic investors are local and foreign investors with financial abilities and commitment to developing a strong attachment to the JV (joint venture) company, as well as support enterprises in carrying out tasks in six fields after equitisation.

The six fields include the transfer of new technology, training of labour force, increase of financial ability, corporate management, supply of material, and development of consumption markets.

However, there are no specific regulations for different types of enterprises. For instance, enterprises that are weak on technology will need strategic investors with a strong technology base. Some state-owned enterprises need strategic investors with great financial potential, while some others will need strategic investors experienced in corporate management.

Therefore, the state should pay attention to the specific characteristics of each sector to set specific standards in seeking strategic investors that will suit development targets and the real situation of equitised enterprises.

The state should have specific guidelines for equitised enterprises to seek strategic investors based on general regulations on seeking strategic investors under Decree 59.

According to the second point under Decree 59, for reaching a direct agreement or conducting auctions among eligible strategic investors before any initial public offering (IPO), the selling price of a share under the agreement or the auctions should not be lower than the initial selling price of a share that is approved by authorities for the equitisation plan.

That is not attractive for strategic investors because there is no gap between the selling price of shares offered at agreements or auctions and the selling price on the market. That means to not have preferential for finding strategic investors.

So, the state should permit lower selling price of a share for strategic investors against the price on the market and of course, investors should have an obligation in developing enterprises after equitisation when enjoying the preferential in the selling price of a share.

The state should have specific guidelines for activities supporting enterprises seeking real strategic investors.

What does the State do to enhance capital withdrawals?What are the responsibilities of the leaders of equitised enterprises in promoting the equitisation process at enterprises?

To avoid obstacles in the implementation of capital withdrawals, the state should pay attention to the inspection and supervision of capital withdrawal processes together with the implementation of the withdrawals.

As for the responsibility of the leaders of ministries and equitised enterprises, they have a larger role in implementing equitisation of SOEs.

The Government has set a target for restructuring state-owned enterprises, and as a leader is a representative of the State in ministries and enterprises, he/she must complete this target.

If a leader does not complete the target, he/she must face the disciplinary measures of the state. This should encourage a leader to complete his/her mission. — VNS