SOEs seek strategic partners in vain

Vietnam Airlines, one of more than 430 SOEs slated for privatisation by the end of 2015, has been seeking strategic partners to implement its initial public offering (IPO) scheduled in September after seven years of delays.— File Photo

HA NOI (Biz Hub) — Seeking strategic partners is one of the problems facing State-owned enterprises (SOEs) during their equitisation process.

General Director of Vietnam Airlines, Nguyen Ngoc Minh, was quoted by Securities Investment newspaper as saying that the national flag carrier wanted to find an international airlines to be its strategic partner, but also welcomed financial investors.

Vietnam Airline's chairman Pham Viet Thanh, said at a meeting in April that finding strategic partners was most important for the September IPO, adding that in case no strategic partner was found by September, the IPO would still be implemented, according to the newspaper.

Under the equitisation plan which was pending for the Prime Minister's approval, Vietnam Airlines could sell only about 20-30 per cent of stakes in its IPO – not an attractive enough option to strategic partners, an expert told Investment Bridge newspaper.

Vietnam Airlines, with the estimated value of around US$2.7 billion as of 31 March 2013, is the only one left among the six main flag carriers in the region that is not publicly listed.

The Viet Nam National Textile and Garment Group (Vinatex) was also another SOE looking for strategic partners for its IPO. Its IPO plan was recently approved by the Prime Minister under which the State will hold 51 per cent stake after the IPO. Finding a suitable strategic partner was not easy, according to Vinatex's General Director Tran Quang Nghi.

Statistics at the Government's conference on restructuring (SOEs) held early this year showed that a total of 432 SOEs would be equitised during the 2014-15 period, a move which was being seen as too ambitious.

Nguyen Trong Nghia, Director of the Ministry of Finance's Department of Legal Affairs, said buyers were indispensible for a successful IPO.

The share supply would be abundant in the coming two years while finding buyers would be difficult. — VNS