HA NOI (Biz Hub) — The agriculture and rural development sector would promote restructuring of State-Owned Enterprises (SOEs) and withdrawal of capital from non-core business in the second half of this year, according to the Ministry of Agriculture and Rural Development.

At the ministry's conference in Ha Noi yesterday on reviewing the restructuring of SOEs in the agricultural sector in the first half of this year, a representative of the ministry said 12 groups and corporations in the sector will be equitised by the end of this year.

In the first half of this year, the ministry also continued promotion of equitisation for the Viet Nam Vegetable, Fruit and Farming Product Corporation and the Viet Nam Tea Corporation.

The ministry expects to approve equitisation plans for the Viet Nam Forest Corporation and the Agricultural Material Corporation in the last quarter of this year and the Southern Food Corporation in the first quarter of 2016.

It also reported that it completed equitisation of nine corporations and companies in 2014.

However, Do Van Nam, head of the ministry's Enterprise Management Department, said withdrawal of capital from non-core business and selling of state's shares at agricultural enterprises was slower against schedules.

By June 30, the enterprises in the agricultural sector withdrew VND1.718 trillion (US$78.8 million) in total, or 34 per cent of the target. They will continue withdrawing the entire capital of VND3.31 trillion ($151.8 million), the ministry said.

Nam said the enterprises have faced many challenges that could affect their plans to withdraw capital from non-core business, including low price of shares and lower offer price of shares against their face value. Some enterprises had even made initial public offers of shares but it did not attract investors.

Le The Chi, deputy general director of the Viet Nam Coffee Corporation, said the corporation must withdraw its capital from six companies but those companies have small capital of VND40 billion ($1.8 million) each. Therefore, investors were not interested in them and the corporation was facing difficulty in withdrawing its capital from them.

To deal with the difficulty in withdrawal of the capital from non-core business, the government permits the enterprises to sell share lots and shares for labour, Nam said.

Minister of agriculture and rural development Cao Duc Phat said enterprises must have specific plans to promote withdrawal of their capital from non-core business, especially state-run farms. — VNS