SOE equitisation to fuel M&A activity
Experts forecast equitising hundreds of State-owned enterprises
(SOEs) between now and next year as ordered by the Government will lead
to stronger merger and acquisition (M&A) activity in Vietnam, the
Saigon Times Daily reported on August 12.
Experts forecast equitising hundreds of State-owned enterprises
(SOEs) between now and next year as ordered by the Government will lead
to stronger merger and acquisition (M&A) activity in Vietnam, the
Saigon Times Daily reported on August 12.
The M&A activity is also supported by State business groups and corporations required to divest from non-core business areas, including banking, real estate and securities investments.
Experts said at Vietnam M&A 2014 Forum organised by the Ministry of Planning and Investment in Ho Chi Minh City last week that SOEs will provide the market with a huge amount of capital via their divestments of non-core investments and equitisation, and these are great opportunities for investors.
The Daily quoted John Ditty, Chairman of KPMG Limited for Vietnam and Cambodia, as saying that equitising State corporations, including MobiFone, Vietnam Airlines and Vinatex will spur the M&A market and open opportunities for private investors to take part in management and operation of these enterprises.
Japan has emerged as one of the major foreign investors in Vietnam. Sam Yoshida, senior managing director of Recof, an M&A consulting firm in Japan, was cited by the Daily as saying that more investors from the country in Northeastern Asia are keen on the Vietnamese market thanks to low labour cost, a plentiful supply of labour, political stability and great potential for growth.
Statistics showed Japanese firms have invested in a dozen of sectors in Vietnam and participated in at least three M&A deals in each sector. Yoshida also mentioned the factors for successful deals with Japanese investors.
“Vietnamese enterprises need to be patient and provide accurate details when they negotiate with Japanese partners. Prices are not the top priority of Japanese investors, it is long-term benefits,” the Daily quoted Yoshida as saying.
At a meeting in Hanoi last week, Prime Minister Nguyen Tan Dung told ministries and localities to speed up the equitisation of State-owned enterprises and continue improving policies and mechanisms to address the problems arising from the SOE restructuring process.
It is expected that the target for 432 SOEs to go public towards the end of 2015 is possible as the pace of SOE equitisation in the past seven months of this year was fast, according to the Steering Committee for Enterprise Reform and Development.
In the January-July period, State corporations and groups divested a total of 2.975 trillion VND, three times higher than that of last year, but the divestment process remained slow.
There have been 76 enterprises restructured in the year to date, with 55 equitised, two dissolved, one sold, 15 merged and three filing for bankruptcy. As of last month, the Prime Minister had approved the restructuring plans of 20 State groups and corporations, including Vietnam National Textile and Garment Group (Vinatex).
Vinatex is scheduled to offer its initial public offering (IPO) on the Hochiminh Stock Exchange (HOSE) in September this year.
According to Vinatex’s equitisation plan approved by the Government, the group has total chartered capital of 5 trillion VND. After the group goes public, the State will retain a 51 percent stake while 24 percent will be offered to strategic investors, 24.4 percent put up for auction and 0.6 percent sold to employees.
Another State corporation, Vietnam Airlines, is proceeding with a plan to launch an IPO later this year and sell shares to strategic investors in the fourth quarter of this year before it operates as a shareholder-held concern from January next year.
According to Decision 1807/QD-BGTVT signed by Minister of Transport Dinh La Thang, the value of holding company Vietnam Airlines was more than 57.1 trillion VND (over 2.7 billion USD) as of March 31 last year, with State capital making up more than 10.5 trillion VND.
The corporation under the Ministry of Transport plans to increase its chartered capital from more than 14.1 trillion VND this year to 26.32 trillion VND in 2018 by selling shares to investors or its shareholders after equitisation.
Vietnam Airlines wants to sell 25 percent of its chartered capital to investors at the IPO. Later, the State holding at this corporation will gradually decline to 65 percent.-VNA
The M&A activity is also supported by State business groups and corporations required to divest from non-core business areas, including banking, real estate and securities investments.
Experts said at Vietnam M&A 2014 Forum organised by the Ministry of Planning and Investment in Ho Chi Minh City last week that SOEs will provide the market with a huge amount of capital via their divestments of non-core investments and equitisation, and these are great opportunities for investors.
The Daily quoted John Ditty, Chairman of KPMG Limited for Vietnam and Cambodia, as saying that equitising State corporations, including MobiFone, Vietnam Airlines and Vinatex will spur the M&A market and open opportunities for private investors to take part in management and operation of these enterprises.
Japan has emerged as one of the major foreign investors in Vietnam. Sam Yoshida, senior managing director of Recof, an M&A consulting firm in Japan, was cited by the Daily as saying that more investors from the country in Northeastern Asia are keen on the Vietnamese market thanks to low labour cost, a plentiful supply of labour, political stability and great potential for growth.
Statistics showed Japanese firms have invested in a dozen of sectors in Vietnam and participated in at least three M&A deals in each sector. Yoshida also mentioned the factors for successful deals with Japanese investors.
“Vietnamese enterprises need to be patient and provide accurate details when they negotiate with Japanese partners. Prices are not the top priority of Japanese investors, it is long-term benefits,” the Daily quoted Yoshida as saying.
At a meeting in Hanoi last week, Prime Minister Nguyen Tan Dung told ministries and localities to speed up the equitisation of State-owned enterprises and continue improving policies and mechanisms to address the problems arising from the SOE restructuring process.
It is expected that the target for 432 SOEs to go public towards the end of 2015 is possible as the pace of SOE equitisation in the past seven months of this year was fast, according to the Steering Committee for Enterprise Reform and Development.
In the January-July period, State corporations and groups divested a total of 2.975 trillion VND, three times higher than that of last year, but the divestment process remained slow.
There have been 76 enterprises restructured in the year to date, with 55 equitised, two dissolved, one sold, 15 merged and three filing for bankruptcy. As of last month, the Prime Minister had approved the restructuring plans of 20 State groups and corporations, including Vietnam National Textile and Garment Group (Vinatex).
Vinatex is scheduled to offer its initial public offering (IPO) on the Hochiminh Stock Exchange (HOSE) in September this year.
According to Vinatex’s equitisation plan approved by the Government, the group has total chartered capital of 5 trillion VND. After the group goes public, the State will retain a 51 percent stake while 24 percent will be offered to strategic investors, 24.4 percent put up for auction and 0.6 percent sold to employees.
Another State corporation, Vietnam Airlines, is proceeding with a plan to launch an IPO later this year and sell shares to strategic investors in the fourth quarter of this year before it operates as a shareholder-held concern from January next year.
According to Decision 1807/QD-BGTVT signed by Minister of Transport Dinh La Thang, the value of holding company Vietnam Airlines was more than 57.1 trillion VND (over 2.7 billion USD) as of March 31 last year, with State capital making up more than 10.5 trillion VND.
The corporation under the Ministry of Transport plans to increase its chartered capital from more than 14.1 trillion VND this year to 26.32 trillion VND in 2018 by selling shares to investors or its shareholders after equitisation.
Vietnam Airlines wants to sell 25 percent of its chartered capital to investors at the IPO. Later, the State holding at this corporation will gradually decline to 65 percent.-VNA
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