Two foreigners walk pass a customer centre of Mobifone, a State-owned enterprise (SOE) which was under equitisation process. (Photo: vneconomy.vn) Hanoi (VNA) - Transparency in the equitisation of State-ownedenterprises (SOEs) must be enhanced to attract foreign strategic investment inthe process, experts said.
TheGovernment plans to divest from more than 130 SOEs by 2020, which wouldsignificantly push up share supply in the coming years.
SaigonSecurities Inc estimated that the Government’s planned divestment from SOEswould be worth some 4.35 billion USD – a huge sum that would require capitalresources from foreign strategic investors to absorb.
Sellingstake to foreign strategic investors would have a lot of positive impacts, suchas easing the financial burden on the State, improving operational efficiency,promoting technology transfer and enhancing management capacity andcompetitiveness.
“Weknow strategic investors will not only bring newfinancial resources, but also other changes,” Nguyen Dinh Cung, Directorof the Central Institute for Economic Management (CIEM) said.
However,the reality is attracting foreign strategic investors is not always easy.
A CIEMreport on stake sale to strategic investors of 46 SOEs showed that stake wortha total 28.4 trillion VND (1.25 billion USD) planned to be sold for strategicinvestors, but only 12.7 trillion VND was purchased. In addition, only fourSOEs attracted foreign investment, not to mention that foreign investors onlypurchased limited stake.
AmericanChamber of Commerce Executive Director Adam Sitkoff was quoted by the VietnamNews Agency as saying that investors wanted to feel at ease when investing in abusiness.
Theyneeded to look at the process of evaluating the SOEs, whether it was in linewith international standards, he said, urging changes to attract strategicinvestors.
Expertsalso said the cap on foreign ownership in several sectors discouraged theparticipation of foreign investors in the equitisation of SOEs.
Otherproblems that made investors hesitant were the lack of accuracy in evaluatingSOEs, lack of transparency in the equitisation process and lowefficiency of SOEs, besides the complicated procedure.
Accordingto Pham Duc Trung, head of CIEM’s Corporate Development and Reform Department,it was critical to improve transparency in theSOE equitisation process.
Besidesthis, the role of strategic investors in corporate managementfollowing privatisation must be enhanced to attract theirparticipation, he said.
Accordingto CIEM, the criteria for strategic investment must be clarified together withrenovating the mechanism of evaluating SOEs value and improving the efficiencyof SOEs.
DangQuyet Tien, director of Corporate Finance under the Ministry of Finance, saidthe Government was promoting transparency in SOE privatisation toattract foreign investors.-VNA
VNA
