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HA NOI (Biz Hub) — The poor first-quarter response to IPOs (Initial Public Offerings) launched by State-owned enterprises (SOEs) shows that they have not prepared well for their equitisation process, a VnExpress report said.

It said more than 70 per cent of the shares offered went unsold from January to March, during which 25 SOEs put up 355 million shares on the two stock exchanges in the country, three times higher than the same period last year. The report estimated the value of unsold stock at nearly VND2.53 trillion (US$120 million). It said many companies saw more than 90 per cent of their shares unsold.

Of the 15 businesses that could not sell out theirs, the Transportation and Unloading Company of Inland Waterway (Tranciwa) fared the worst with almost all its shares going unsold. The company, which has a charter capital of VND58.5 billion ($2.8 million), put up 5.85 million shares for sale but sold just 24.200 for VND242 million ($11.500).

Others companies like the Ha Noi Construction Corporation (Hancorp), Viet Nam Motors Industry Corporation (Vinamotor), Viwaseen Infrastructure Construction Investment JSC (Viwaseen), Civil Engineering Construction Corporation No 6 (Cienco 6) and Waterway Transportation Co (Vivaso) also had high unsold rates of 96-97 per cent.

Several company executives admitted they had not prepared well for their IPOs. Pham Ngoc Dich, Chairman of Vivaso, said the company did not have the time it needed to plan the IPO and complete its official website as required. He said the company would organise a shareholders' meeting by the end of this month and discuss continuing the share sale in 2015.

Though the Vietnam Waterway Construction Corp (Vinawaco), was able to sell all the shares offered in its IPO, chairman Nguyen Duy Hien admitted that the company did not have enough time to look for strategic investors and had picked some before a proper evaluation of the latter's capacity. Market observers have said that the IPO failures also have to do with the health of the enterprises. For example, the profits of Tranciwa and Hancorp declined in the three years before they launched their IPOs, and this could have discouraged investors.

Phan Dung Khanh, head of the Investment Division of MayBank Kim Eng Securities Co, said many businesses failed to show a clear development strategy and target suitable buyers. — VNS