The Government on July 9 officially promulgated a resolution asking State-owned groups and corporations to complete a capital withdrawal from non-core investments by 2015.
Accordingly, these groups and corporations will have to ensure market principles, transparency and retain State-owned capital and assets at the highest level.
The Government said this is considered an important step to restructure State-owned enterprises, especially those invested in risky sectors such as real estate, banking, finance and insurance.
The groups and corporations will have to map out restructuring plans including capital divestment from non-core businesses. They will also have to withdraw investment from joint ventures and associated companies which do not relate to main businesses.
Organisations involved in these risky ventures have been required to promptly submit their plans for approval. Those involved in less risky investments will be allowed to divest gradually.
Ministries and provincial people's committees have been assigned to consider and approve the capital withdrawal plans after receiving permission from the Ministry of Finance.
The ministry has been asked to send supervisors to State-owned groups and corporations to check their use of State capital and capital withdrawal processes during their restructuring.
Statistics from the Party Committee for Central Businesses Bloc showed that 21 out of 31 State-owned groups and corporations have expanded to non-core business areas, using a total of around 22.6 trillion VND (over 1 billion USD).
Among those, Song Da Holdings Group invested 6.94 trillion VND (330.47 million USD), 2.3 trillion VND (109 million USD) higher than its registered capital; PetroVietnam, around 5.4 trillion VND (257 million USD), accounting for 83 percent of its capital and Electricity of Vietnam (EVN), nearly 2.1 trillion VND (100 million USD). EVN has suffered a loss of 10 trillion VND (476 million USD).
Most of the groups and corporations said their non-core investments are at an acceptable rate of 30 percent lower than their charter capital. The non-core investments of PetroVietnam account for 3.7 percent of its charter capital, while the rate is 2.8 percent for EVN.
Vietnam National Coal and Mineral Industries (Vinacomin) recently decided to withdraw from its non-core investments, equalling 115.8 billion VND (5.5 million USD) in four companies including Vietnam National Aviation Insurance Company, BIDV Expressway Development Company, Hai Ha Economic Zone Development and Investment Company and Long Thanh Development and Investment Joint Stock Company.
On the same day, PetroVietnam proposed to retain its holdings from 18-20 percent in PetroVietnam Finance Corporation and PetroVietnam Insurance Corporation as they said the companies are necessary for its operations.
However, PetroVietnam's Chairman Phung Dinh Thuc said the group will withdraw all investment from the companies if the Prime Minister does not approve the proposal.-VNA
Accordingly, these groups and corporations will have to ensure market principles, transparency and retain State-owned capital and assets at the highest level.
The Government said this is considered an important step to restructure State-owned enterprises, especially those invested in risky sectors such as real estate, banking, finance and insurance.
The groups and corporations will have to map out restructuring plans including capital divestment from non-core businesses. They will also have to withdraw investment from joint ventures and associated companies which do not relate to main businesses.
Organisations involved in these risky ventures have been required to promptly submit their plans for approval. Those involved in less risky investments will be allowed to divest gradually.
Ministries and provincial people's committees have been assigned to consider and approve the capital withdrawal plans after receiving permission from the Ministry of Finance.
The ministry has been asked to send supervisors to State-owned groups and corporations to check their use of State capital and capital withdrawal processes during their restructuring.
Statistics from the Party Committee for Central Businesses Bloc showed that 21 out of 31 State-owned groups and corporations have expanded to non-core business areas, using a total of around 22.6 trillion VND (over 1 billion USD).
Among those, Song Da Holdings Group invested 6.94 trillion VND (330.47 million USD), 2.3 trillion VND (109 million USD) higher than its registered capital; PetroVietnam, around 5.4 trillion VND (257 million USD), accounting for 83 percent of its capital and Electricity of Vietnam (EVN), nearly 2.1 trillion VND (100 million USD). EVN has suffered a loss of 10 trillion VND (476 million USD).
Most of the groups and corporations said their non-core investments are at an acceptable rate of 30 percent lower than their charter capital. The non-core investments of PetroVietnam account for 3.7 percent of its charter capital, while the rate is 2.8 percent for EVN.
Vietnam National Coal and Mineral Industries (Vinacomin) recently decided to withdraw from its non-core investments, equalling 115.8 billion VND (5.5 million USD) in four companies including Vietnam National Aviation Insurance Company, BIDV Expressway Development Company, Hai Ha Economic Zone Development and Investment Company and Long Thanh Development and Investment Joint Stock Company.
On the same day, PetroVietnam proposed to retain its holdings from 18-20 percent in PetroVietnam Finance Corporation and PetroVietnam Insurance Corporation as they said the companies are necessary for its operations.
However, PetroVietnam's Chairman Phung Dinh Thuc said the group will withdraw all investment from the companies if the Prime Minister does not approve the proposal.-VNA
