State to keep stake in equitised SOEs

However, they still expect the State to be themajority shareholder in the enterprises.

Many SOEs said they have promoted implementation of steps to equitise the enterprises as scheduled. Yet, the equitisation process has yet to meet expectations.

The government is getting tough on SOE equitisation

Le Van Tuan, general director of the Vietnam Machine Installation Corporation (Lilama), said the Prime Minister has approved its equitisation plan and that it must be finished by 2015, reports Tuoi Tre news wire.

Tuan said Lilama has set up a division to prepare the necessary procedures for the equitisation process. Investment in non-core businesses has not had much effect on the process, but the corporationmust collect debts from some projects to implement the equitisation activities.

Tuan said Lilama would still ensure the equitisation is done as per the plan.

Ha Hung, general director of the Civil Engineering Construction Corporation No5 (CIENCO 5), said the Prime Minister has approved its equitisation plans also and the State would hold 35% if CIENCO5 shares after equitisation, as expected by the enterprises.

CIENCO 5 has hired a consulting firm and expects to complete the necessary procedures in the first quarter this year.

However, the timing of the initial public offering (IPO) must be considered carefully to ensure the maximum efficiency in offering its shares, Hung said.

A representative of the Vietnam Cement Indusitral Corporatiuon (Vicem) said Vicem expects to finish its equitisation process in 2015.

At present, Vicem is withdrawing its capital from some joint ventures. Then the corporation will find strategic partners and choose a suitable time to offer IPO shares in the market, the representative said.

The representative also said the State would still be the majority shareholder at Vicem because many foreign investors want to enter the local cement market. The market would succumb to the foreign investors if the State is not the majority shareholder, he added.

 Meanwhile, Tran Quang Nghi, general director of the Vietnam Textile and Garment Group (Vinatex), said the company has prepared for its equitisation programme and has promoted it at its member companies.

Now, Vinatex is waiting for the Government’s approval of the percentage of shares for foreign strategic investors out of the 49% of shares. That means the State hold 51% of the corporation’s shares after equitisation.

Economic expert Le Dang Doanh said many industries in Vietnam are considered sensitive ones, such as textiles, garments, and cement, but globally, they are not sensitive sectors. So it is not necessary for the State to hold 51% of the shares in enterprises.

Enterprises should sell more shares to investors to attract more investment at home and abroad, renew the management, improve the competitiveness and efficiency of SOEs, Doanh said.

Equitisation should focus on attracting good strategic investors and on having large targets t take full advantage of capital, market and management in the world and increase efficiency in production and business, he said.