Following the tardy progress of equitisation of State-owned enterprises last year, the Ministry of Finance fears similar delays this year too and has said it will ask the Government to extend deadlines for further equitisation.
Only 65 enterprises were equitised last year compared to 349 in 2008. The Government had set a target of 714 in 2009 and 2010, including 65 large corporations with an average capital of more than 1 trillion VND (52.49 million USD), the ministry said.
Minister of Finance Vu Van Ninh blamed the slow pace on the large size of the companies involved, saying it usually takes a long time to select strategic investors, value their assets, and do other tasks, the Dau Tu (Vietnam Investment Reviews) reports.
The global economic crisis last year saw demand for securities take a hit, affecting the equitisation process, he explained.
“So we can not rush in and equitise at any price. The process should be implemented in the most effective way to avoid a loss of State assets,” he said.
The equitisation process reflects the Government’s decision to restructure the economy and would force enterprises to stand on their own feet or go bankrupt if they incur losses.
The Government had decided to reduce its stakes in small companies and sectors where it only needs to have a small presence so that it could invest in key sectors, he added.
The State Capital Investment Corporation, the Government’s investment arm, will focus on withdrawing State capital from 87 percent of equitised enterprises this year.
Last year it withdrew from nearly 300 enterprises, four times more than in 2008. According to a ministry report, 3,910 enterprises have been equitised under a process that began in 1992./.
Only 65 enterprises were equitised last year compared to 349 in 2008. The Government had set a target of 714 in 2009 and 2010, including 65 large corporations with an average capital of more than 1 trillion VND (52.49 million USD), the ministry said.
Minister of Finance Vu Van Ninh blamed the slow pace on the large size of the companies involved, saying it usually takes a long time to select strategic investors, value their assets, and do other tasks, the Dau Tu (Vietnam Investment Reviews) reports.
The global economic crisis last year saw demand for securities take a hit, affecting the equitisation process, he explained.
“So we can not rush in and equitise at any price. The process should be implemented in the most effective way to avoid a loss of State assets,” he said.
The equitisation process reflects the Government’s decision to restructure the economy and would force enterprises to stand on their own feet or go bankrupt if they incur losses.
The Government had decided to reduce its stakes in small companies and sectors where it only needs to have a small presence so that it could invest in key sectors, he added.
The State Capital Investment Corporation, the Government’s investment arm, will focus on withdrawing State capital from 87 percent of equitised enterprises this year.
Last year it withdrew from nearly 300 enterprises, four times more than in 2008. According to a ministry report, 3,910 enterprises have been equitised under a process that began in 1992./.
