State-owned investment fund State Capital Investment Corporation (SCIC) may offload its stakes in Viet Nam Construction and Import-Export Joint Stock Corporation (Vinaconex) again this year after a failure in 2017.
Nguyen Duc Chi, SCIC chairman, said there are two scenarios for the divesture of Vinaconex in 2018: the SCIC can sell the leftover stake in the previous sale of 22 per cent of Vinaconex’s equity in December 2017 or the SCIC can offer its entire stake of more than 57.7 per cent in Vinaconex.
Vinaconex is one of the listed State-owned enterprises scheduled for divestment by 2020. Chi said if this deadline is missed, the company’s leaders and SCIC will be disciplined by the competent authority.
On December 8, 2017, the SCIC put up for sale 96.2 million shares, equivalent to nearly 22 per cent of Vinaconex’s capital, but sold only 5.3 million shares.
According to Chi, who is also Vinaconex’s chairman, the sale failed due to the “too good” market condition last year.
In 2017, Viet Nam’s benchmark index VN-Index soared 48 per cent, as one of the top performers in the world. Vinaconex’s stock price also jumped over 60 per cent, from VND13,600 per share by the end of 2016 to VND21,800 (US$0.96) each by end-2017.
The good market forced the SCIC to sell capital at a high price that was unattractive to investors. However, if the market had been bad, the SCIC would not want to sell because of the low price and investors would not want to buy, Chi told shareholders at Vinaconex’s annual shareholders’ meeting on April 17.
Thus, picking the right time between the moment of sale and a favourable market condition was very important, Chi said, adding that if the market situation in 2018 remained favourable, the SCIC would sell Vinaconex’s capital at the appropriate time.
“The feasibility here is that investors are interested and will pay a good price,” Chi said.
Vinaconex’s shares, coded VCG on the Ha Noi Stock Exchange, is trading around VND21,000 per share.
In 2017, Vinaconex reported total revenues of nearly VND10.9 trillion ($478 million), up 127.5 per cent over the previous year. Its net profit also surged 137 per cent year-on-year to reach VND1.63 trillion.
Surges in revenue and profits last year came from high income from the withdrawal of capital in Viwasupco JSC, which brought the company VND762.5 billion. — VNS