In its business registration, Vinaconex had some sectors subject to foreign investment restriction including labour export and construction and operation of large power plants which allow no foreign investment as per 2014 Law on Investment. (Photo: kienthuc.net.vn)

Hanoi (VNA) - The State Securities Commission has approved Vinaconex’s request to lock its ceiling foreign ownership ratio at zero percent, saying the move complies with regulations.

Earlier, the Vietnam Construction and Import-Export JSC (Vinaconex) asked for permission to adjust its foreign ownership limit to zero percent from the current 49 percent to prepare for a share offload by the State Capital Investment Corporation (SCIC) and Viettel.

Both SCIC and Viettel will sell their entire stakes, collectively 79 percent, in Vinaconex worth 7.43 trillion VND (317.6 million USD), in a public auction on November 22 on the Hanoi Stock Exchange.

With the lock, foreign investors will be ineligible to participate in the auction.

Foreign shareholders owned a combined 10.86 percent of Vinaconex’s capital as of November 9, including PYN Elite Fund (7.1 percent) and Market Vector Vietnam ETF (1.79 percent). These investors will have to sell their holdings to meet the company’s new policy.

According to Do Trong Quynh, a member of Vinaconex’s management board, this decision is to ensure compliance with State regulations on foreign ownership prior to the auction.

In its business registration, Vinaconex had some sectors subject to foreign investment restriction including labour export and construction and operation of large power plants which allow no foreign investment as per 2014 Law on Investment, Quynh was quoted as saying on ndh.vn.

Regarding whether foreign shareholders are required to sell their shares immediately or gradually, Quynh said guidance was needed from the State Securities Commission.

Vinaconex underperformed this year with nine-month revenue decreasing 4 percent on-year to 6.4 trillion VND while its profit after tax dropped 41 percent to 368 billion VND.  

Its shares, with the sticker VCG, are trading at around 18,000 VND (0.77 USD) per share on the Hanoi Stock Exchange.-VNA