SOE equitisation likely to fall short of annual target

Thursday, Jul 26, 2018 08:37

A view of the Vung Ang Thermo Power Plant No.1 in central Ha Tinh Province. — VNA/VNS Photo

The equitisation of State-owned enterprises (SOEs) is unlikely to meet this year’s target, as only 19 SOEs had completed the process by the end of June.

Viet Nam plans to complete the equitisation of 85 SOEs this year.

The statement was made by Deputy Prime Minister Vuong Dinh Hue, head of the Government Steering Committee on Corporate Renovation and Development.

Hue chaired a meeting in Ha Noi on Wednesday to review SOE restructuring in the first half of 2018 and to launch tasks for the remaining months of the year.

According to a report by the Steering Committee, the total value of the 19 enterprises approved for equitisation was VND40.7 trillion (US$1.76 billion), of which VND23 trillion belonged to the State.

Following equitisation, the firms were expected to have combined charter capital of more than VND22 trillion. The State holds 58.83 per cent of that amount, while 40.66 per cent was sold to strategic investors and 0.51 per cent was sold to employees.

Of them, 16 firms launched initial public offerings (IPO), earning VND22.5 trillion, 4.5 times higher than the total IPO revenue of 2017.

Among those 16 enterprises were a number of large-scale enterprises such as the PetroVietnam Power Corporation (PV Power), the Viet Nam Oil Corporation (PV Oil), Binh Son Refining and Petrochemical Company (BSR), the Viet Nam Southern Food Corporation, the General Electric Corporation 3 and the Ha Noi Trade Corporation (Hapro).

Regarding State capital divestment, the country reaped VND5.6 trillion from 42 SOEs in the first six months of this year.

The Steering Committee also reported that the number of newly-established enterprises in the first six months of this year was more than 64,500, an increase of 5.3 per cent over the same period in 2017.

The total registered capital of newly-established enterprises reached nearly VND650 trillion, up 8.9 per cent over the same period in 2017.

More than 6,600 enterprises dissolved or filed for bankruptcy in the first six months, an increase of 21.8 per cent year-on-year.

The total number of businesses turning inactive and awaiting dissolution was more than 34,800, up by 48 per cent against 2017. Meanwhile, the number of enterprises being temporarily suspended was nearly 18,000, an increase of 25.1 per cent year-on-year.

Slow privatisation in HCM City and Ha Noi

According to the initial plan, HCM City had to equitise 39 enterprises, while the figure for Ha Noi was 11, but until now, not a single firm had equitised out of the cities’ lists.

The hand-over of privatised enterprises to the State Capital Investment Corporation was also slow, while registrations to list on the stock market had not been strictly implemented.

Deputy PM Hue attributed the sluggish progress of SOE equitisation to the ministries, branches and localities’ lack of drastic measures to achieve the target.

Hue emphasised the importance of greater efforts in the last six months to complete the equitisation plan for 2018. — VNS

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