Sale of stakes in SoEs marks new era

The State Capital Investment Corporation (SCIC) plans to sell the Government's stakes in 10 major State-owned enterprises. These include listed companies like Vinamilk, FPT Corp, Bao Minh Insurance Corp, Tien Phong Plastic Co, and Binh Minh Plastic Co. It has attracted the attention of local and foreign investors.

Vietnam News Agency spoke with a senior official from the Ministry of Finance and executives at Vinamilk and Binh Minh Plastic about the proposed disinvestment.

* Dang Quyet Tien, Deputy Head of the Ministry of Finance's Agency for Corporate Finance:

The Government issued Public Letter No 1787/TTg-DMDN on October 8 to approve the SCIC's restructure plan. The Government has instructed the SCIC to select a suitable time and make appropriate divestment plans to ensure minimum impact on the targeted companies' operations and workers and on the market.

Vinamilk is an example. The divestment must ensure it does not affect the dairy market and consumers' interests. Vinamilk is a large enterprise that has dominated the local market and controlled milk prices.

Therefore, investors who buy the Government's shares in Vinamilk when it sells them must commit to implementation of approved production and business plans to avoid any dislocation.

The decision on divestment shows the Government's resolution to implement the Law on Management and Use of State Capital and reduce its involvement in economic sectors where the private sector can operate. Instead, the Government will earmark its resources for fields that require its control – such as security-defence, social welfare, poverty reduction, and infrastructure.

Money raised from the disinvestment will be used, as stipulated in the resolution of the third plenum of the ninth Party Central Committee issued in 2003 on continuing restructure, renovation, development and promotion of efficiency for SOEs, to invest in the economy, especially in sectors subject to State control.

The divestment roadmap will be decided by the SCIC.

* Bui Thi Huong, Executive Director – Human Resources Administration and Public Relation of Viet Nam Dairy Products Joint Stock Company (Vinamilk):

Vinamilk is an enterprise with an efficient business and good management, which brings value to shareholders. So Vinamilk investors hope to buy more of the shares sold by the Government.

The divestment in Vinamilk is a good opportunity for investors if there is a public auction to sell the Government's shares and a chance to ensure the maximum benefit for the Government.

Vinamilk also expects its existing shareholders to increase their holding in the company after the auction.

After the State sells its shares in Vinamilk, the company will continue with its development strategies for the next five and 10 years to become a multinational company operating at a global level.

* Nguyen Hoang Ngan, General Director of Binh Minh Plastic Joint Stock Company:

The Government owns a part of the company's shares as a shareholder. It sells its shares to other investors but the company's production and business activities will remain unchanged.

One important thing is that which investors are to buy the Government's shares in the company. Those investors must also hold the shares for a long term and accept plans for the stability and development of production and business by the company.

Now Binh Minh Plastic has two major shareholders – the Government and the Siam Cement Public Company Limited – who own around 50 percent of the total shares, including 29.4 percent by the Government.

The Government's sale of its entire stake could persuade Siam to buy more and get a controlling stake in the company because Binh Minh Plastic is one of the most efficient businesses in the plastic industry in Vietnam.-VNA