State-owned telecoms group Mobifone's head office in Hanoi. The company is among 92 SOEs that must be equitised in 2020. (Photo: thoibaonganhang.vn) Hanoi (VNA) - The equitisationof State-owned enterprises (SOEs) has fallen behind the target set by theGovernment and ministries for 2017-2020.
In 2019, only 12 SOEs gained approval for theirequitisation plans, including three that were on a list of 128 approved bythe Prime Minister. Since 2017, 171 SOEs have been approvedfor equitisation.
There are 92 SOEs left waiting for equitisationplans to be approved, including the Vietnam Bank for Agriculture and RuralDevelopment (Agribank), telecoms group Mobifone, the Vietnam Post andTelecommunications Group (VNPT), the Vietnam National Coffee Corporation(Vinacafe) and the Vietnam National Chemical Group (Vinachem).
According to the Ministry of Finance, companieshad not completed equitisation plans because ministries and Governmentagencies had not agreed with their land valuations. In addition, somelocal authorities and SOEs were not ready to leave their businesses to privateinvestors.
Nguyen Doan Toan, Vice Chairman of the HanoiPeople’s Committee, said the city had to proceed with the equitisation oflocal State-owned enterprises slowly because there were problems that neededresolving.
The city had asked for the assistance ofthe Ministry of Finance and its Department of Enterprise Finance to speed upthe equitisation of local SOEs, he said.
Some securities firms saw no improvementsin equitisation or SOE divestment in 2020.
“It will be difficult to achieve the target asproblems in the equitisation process have not been fully solved, especiallyissues related to land pricing,” VNDirect Securities Corporation (VNDS) said inits 2020 economic outlook.
There was also uncertainty about the chance theGovernment would continue selling its stakes in equitised SOEs such as theVietnam Dairy Products JSC (Vinamilk), the Vietnam National Petroleum Group(Petrolimex), the Vietnam Engine and Agricultural Machinery Corporation (VEAM)and Bao Minh Insurance Corporation in 2020, VNDS said.
Chairman of the State Capital ManagementCorporation (SCIC) Nguyen Duc Chi told reporters that it was difficult tofind potential investors for some SOEs when the market conditions were soharsh.
In some large-cap SOEs, big shareholdersheld more than 51 percent of charter capital, so outside investors werenot interested in buying their shares, he said.
Normally, a private investor would be moreinterested in purchasing shares in a SOE if the major shareholderheld less than 51 percent of the firm and the shares were sold in onepackage.
Positive looks
Though there is only one year remaining for SOEsand government agencies to fulfill the 2017-20 equitisation plan, somebrokerage firms are quite optimistic.
BIDV Securities Corporation (BSC) said there wasincreasing demand for capital for public investment and the restructuringof the stock market, so the Government, ministries and agencieswould hasten their equitisation plans in 2020.
Viet Dragon Securities Corporation (VDSC) saidthe boost of SOE restructuring would help Vietnam improve its chancesof being upgraded to an emerging markets status in the near future.
The Ministry of Finance is finding ways to amendits regulations to allow more opportunities for private investors to take partin restructuring SOEs. If its proposals are approved and become effective inearly 2020, State capital could be sold in many firms in the second halfof 2020, including national carrier Vietnam Airlines, PetroVietnam OilCorporation and PetroVietnam Power Corporation./.
VNA
