The State Securities Commission has approved Vinaconex’s request to lock its ceiling foreign ownership ratio at zero per cent, saying the move complies with regulations.

Earlier, Viet Nam Construction and Import-Export JSC (Vinaconex) asked for permission to adjust its foreign ownership limit to zero per cent from the current 49 per cent to prepare for a share offload by the State Capital Investment Corporation (SCIC) and Viettel.

Both SCIC and Viettel will sell their entire stakes, collectively 79 per cent, in Vinaconex worth VND7.43 trillion (US$317.6 million), in a public auction on November 22 on the Ha Noi Stock Exchange.

With the lock, foreign investors will be ineligible to participate in the auction.

Foreign shareholders owned a combined 10.86 per cent of Vinaconex’s capital as of November 9, including PYN Elite Fund (7.1 per cent) and Market Vector Vietnam ETF (1.79 per cent). These investors will have to sell their holdings to meet the company’s new policy.

According to Do Trong Quynh, a member of Vinaconex’s management board, this decision is to ensure compliance with State regulations on foreign ownership prior to the auction.

In its business registration, Vinaconex had some sectors subject to foreign investment restriction including labour export and construction and operation of large power plants which allow no foreign investment as per 2014 Law on Investment, Quynh was quoted as saying on ndh.vn.

Regarding whether foreign shareholders are required to sell their shares immediately or gradually, Quynh said guidance was needed from the State Securities Commission.

Vinaconex underperformed this year with nine-month revenue decreasing 4 per cent on-year to VND6.4 trillion while its profit after tax dropped 41 per cent to VND368 billion.

Its shares, with the sticker VCG, are trading at around VND18,000 ($0.77) per share on the Ha Noi Stock Exchange. — VNS