SCIC holds long-term investments in four businesses

A Vinamilk employee tests milk quality. The SCIC will retain its shares as long-term investment in four businesses, including Vinamilk. — Photo baohaiquan.vn

HA NOI (Biz Hub) ― The State Capital Investment Corporation (SCIC) will retain its shares in FPT Telecom, Vinamilk (VNM), Hau Giang Pharmaceutical (DHG) and Viet Nam National Reinsurance Corp (VNR) as part of its long-term investment strategy.

This was stated in a restructuring plan approved by Prime Minister Nguyen Tan Dung on Monday with the aim of distributing State capital into key industries more reasonably and enhancing financial efficiency in enterprises until 2015.

Several local news websites calculated that with VNM, DHG and VNR share prices increasing sharply this year, SCIC had earned over VND22 trillion (US$1.05 billion) in profits. They estimated that VNM had made the company VND1.4 trilion ($66.67 million) in dividends in 2013, up 40 per cent over 2012.

FPT Telecom, of which SCIC owns more than half the equity, has helped to earn the State corporation VND200-250 billion ($9.5-11.9 million) per year since its initial investment.

SCIC will continue to hold controlling stakes in 26 companies dealing in roads, waterways, tourism, minerals, trade, investment and services, and withdraw capital from 376 firms, including Viet Nam Construction and Import-Export Corp (Vinaconex), FPT Corp, Bao Viet Holdings, Binh Minh Plastic and Tien Phong Plastic.

With current share prices, the SCIC's divestment from these five companies will gain about VND6 trillion ($285.71 million).

The corporation will continue to wholly own SCIC Investment Ltd, An Giang Stone Exploitation and Processing, and Vinaconex Investment and Mineral Trading Ltd. It is expected to raise equity to VND50 trillion ($2.38 billion) by 2015, according to the plan.

SCIC General Director Lai Van Dao told VnExpress that the company had managed State capital in nearly 1,000 businesses from 2006-13. On September 30, its investment portfolio reached about VND14 trillion ($666.67 million) in book value, and VND71 trillion ($3.38 billion) in market value.

The company was established in 2005 with VND5 trillion ($238.1 million) in equity. That was increased to over VND30 trillion ($1.43 billion) at the end of September.

Some experts recently said State capital should be withdrawn from unessential industries, including dairy firms, but the issue remains controversial. ― VNS