PVN to complete divestment by 2020

In late August, Vietnam Posts and Telecommunications Group (VNPT) and Electricity of Vietnam (EVN) will divest their capital in three major companies with a total charter capital amount of VND1 trillion ($44 million). RELATED CONTENTS: EVN banned from investing in property, banking sectors VNPT to divest capital from Maritime Bank Free wifi at festival spots in major cities SK Telecom to lose rights to coveted bandwidth PM tells VNPT to get ready for equitisation EVN divests from non-core businesses Saigon Postel Corporation On August 29, VNPT will sell all 10.26 million of its shares, equal to 8.53 per cent of all outstanding shares in Saigon Postel Corporation (SPT), at the starting price of VND12.487 ($0.55) per share. SPT was founded in 1995 and operates mainly in telephone, internet, and postal services. SPT’s direct business units includes Saigon South Telephone Centre (SST), S-Telecom, and Saigon Post (SGP), among others. SPT’s charter capital is currently VND1.2 trillion ($52.8 million), with seven major stakeholders controlling 77.08 per cent of the total stakes. Reports showed that SPT has made profit in recent years, however debts from the S-Fone mobile network project (which ceased operations in 2012) has kept the company short on capital for operation as well as expansion. By the end of…... [read more]

While a renewed focus on equitizing State-owned enterprises (SOEs) has been exhibited following the leadership transition in April last year, equitization alone is not a short-term solution to reducing the government’s fiscal deficit. Rather, meeting the government’s 3.5 per cent deficit target for 2017 would have to come on the back of reduced government expenditure, which HSBC in its latest report believes is unlikely, given the government’s growth targets. It has been consistently framed in recent statements by policy makers that the sale of SOEs is viewed as a means to both increase fiscal revenues and reduce government expenditures.  One of the highlights, Decision No.58, signed by Prime Minister Nguyen Xuan Phuc on December 28, 2016, pushed for further divestment of State capital in existing SOEs by eliminating or reducing the minimum level of ownership that the government holds in certain industries. What makes Decision 58 a positive move and deserving of full recognition is the fact that it provides a clearer roadmap for equitization by announcing a total rate of State ownership in specific companies (not just broadly by sectors) that are set to be equitized. As the new sense of urgency in SOE equitization is mainly driven by rising public debt, increased equitization leading to greater revenues and alleviating the government’s fiscal burden is no easy task given the remaining challenges in SOE reform and the recent trends in government expenditure. SOE reform has primarily focused on targeting the sale of minority stakes, while the government retains majority…... [read more]

The vibrant mergers and acquisitions (M&A) market in Vietnam is developing and the 2017-2018 period is forecasted to witness more successful M&A deals, as well as new state divestments, which is a big opportunity for domestic and international investors. Bad debts dampen M&A boom in banking industry Reforms help M&A landscape to shine Serving up an M&A feast Abundant attractive deals make huge contribution to M&A market Danang M&As help overcome delays State divestment from Vinamilk will be imlemented in October 2017 The M&A market in Vietnam reported a record value of $5.8 billion in 2016 and KPMG Vietnam even forecasted that the second half of 2017 will witness more sizable M&A deals. The reason is that the private sector in Vietnam is considering M&A an important strategy to ensure sustainable development and expansion. Also, the Vietnamese government is speeding up state divestment in a number of big firms. Thus, it is likely that more M&A deals will come in the second half of 2017 and early 2018. Below is the list of ten sizable divestment that are forecasted to be implemented during 2017-2018. 1. Vietnam Dairy Products Joint Stock Company (Vinamilk)  The Vietnamese government has approved the plan on selling more than 48.3 million Vinamilk shares, an equivalent of 3.33 per cent of…... [read more]

Representatives of the PetroVietnam Securities Incorporated (PSI) and the Vinacomin Power Holding Corporation told an investors’ conference on July 26 that they were encouraged by investors’ interest shown in purchasing Vinacomin shares. Vinacomin’s Cua Ong coal extraction rig in the northern province of Quang Ninh Ngo Tri Thinh, general director of Vinacomin Power Holding Corporation - a subsidiary of the Vietnam National Coal-Mineral Industries Holding Corporation Ltd (Vinacomin), told more than 100 potential investors that his company is well aware of the pressure and competitive nature of the energy sector, and it strives to meet investor expectations with more effective management and operation systems. The Vinacomin Power Holding Corporation became equitised in January 2016 with 6.8 trillion VND (302.4 million USD) in charter capital, under the stock code DTK on the Hanoi Stock Exchange’s (HNX) Unlisted Public Company Market (UPCoM). The company now has 680 million common stocks trading on the UPCoM at 14,000 VND (0.6 USD) per share, same as its preferential price in 2016. According to its 2016 financial report, the company finished with 354 billion VND (15.74 million USD) in post-tax income, down by 29.36 percent from its 2015 result. The Vinacomin Power Holding Corporation is operating seven thermo-electric plants across the country, generating more than nine billion kilowatts per year. The group is considered the third largest power supplier in the growing Vietnamese power market, following Electricity of Vietnam and the PetroVietnam. The need for thermo-electricity in the country will reach 245 billion kilowatts in 2020…... [read more]

Hanoi, July 28 (VNA) - Representatives of the PetroVietnam Securities Incorporated (PSI) and the Vinacomin Power Holding Corporation told an investors’ conference on July 26 that they were encouraged by investors’ interest shown in purchasing Vinacomin shares.  Ngo Tri Thinh, general director of Vinacomin Power Holding Corporation - a subsidiary of the Vietnam National Coal-Mineral Industries Holding Corporation Ltd (Vinacomin), told more than 100 potential investors that his company is well aware of the pressure and competitive nature of the energy sector, and it strives to meet investor expectations with more effective management and operation systems.  The Vinacomin Power Holding Corporation became equitised in January 2016 with 6.8 trillion VND (302.4 million USD) in charter capital, under the stock code DTK on the Hanoi Stock Exchange’s (HNX) Unlisted Public Company Market (UPCoM).  The company now has 680 million common stocks trading on the UPCoM at 14,000 VND (0.6 USD) per share, same as its preferential price in 2016. According to its 2016 financial report, the company finished with 354 billion VND (15.74 million USD) in post-tax income, down by 29.36 percent from its 2015 result.  The Vinacomin Power Holding Corporation is operating seven thermo-electric plants across the country, generating more than nine billion kilowatts per year. The group is considered the third largest power supplier in the growing Vietnamese power market, following Electricity of Vietnam and the PetroVietnam.  The need for thermo-electricity in the country will reach 245 billion kilowatts in 2020 and a staggering…... [read more]

Vinacomin’s Cua Ong coal extraction rig in the northern province of Quang Ninh (Photo: VNA)     Hanoi (VNA) - Representatives of the PetroVietnam Securities Incorporated (PSI) and the Vinacomin Power Holding Corporation told an investors’ conference on July 26 that they were encouraged by investors’ interest shown in purchasing Vinacomin shares. Ngo Tri Thinh, general director of Vinacomin Power Holding Corporation - a subsidiary of the Vietnam National Coal-Mineral Industries Holding Corporation Ltd (Vinacomin), told more than 100 potential investors that his company is well aware of the pressure and competitive nature of the energy sector, and it strives to meet investor expectations with more effective management and operation systems. The Vinacomin Power Holding Corporation became equitised in January 2016 with 6.8 trillion VND (302.4 million USD) in charter capital, under the stock code DTK on the Hanoi Stock Exchange’s (HNX) Unlisted Public Company Market (UPCoM). The company now has 680 million common stocks trading on the UPCoM at 14,000 VND (0.6 USD) per share, same as its preferential price in 2016. According to its 2016 financial report, the company finished with 354 billion VND (15.74 million USD) in post-tax income, down by 29.36 percent from its 2015 result. The Vinacomin Power Holding Corporation is operating seven thermo-electric plants across the country, generating more than nine billion kilowatts per year. The group is considered the third largest power supplier in the growing Vietnamese power market, following Electricity of Vietnam and the PetroVietnam. The need for…... [read more]

Vinacomin’s Cua Ong coal extraction rig in the northern province of Quang Ninh. — VNA/VNS Photo Minh Duc Representatives of the PetroVietnam Securities Incorporated (PSI) and the Vinacomin Power Holding Corporation told an investors’ conference on Wednesday that they were encouraged by investors’ interest shown in purchasing Vinacomin shares. Ngo Tri Thinh, general director of Vinacomin Power Holding Corporation - a subsidiary of the Vietnam National Coal-Mineral Industries Holding Corporation Ltd (Vinacomin), told more than 100 potential investors that his company is well aware of the pressure and competitive nature of the energy sector, and it strives to meet investor expectations with more effective management and operation systems. The Vinacomin Power Holding Corporation became equitised in January 2016 with VND6.8 trillion (US$302.4 million) in charter capital, under the stock code DTK on the Ha Noi Stock Exchange’s (HNX) Unlisted Public Company Market (UPCoM). The company now has 680 million common stocks trading on the UPCoM at VND14,000 ($0.6) per share, same as its preferential price in 2016. According to its 2016 financial report, the company finished with VND354 billion ($15.74 million) in post-tax income, down by 29.36 per cent from its 2015 result. The Vinacomin Power Holding Corporation is operating seven thermo-electric plants across the country, generating more than nine billion kilowatts per year. The group is considered the third largest power supplier in the growing Vietnamese power market, following Electricty of Vietnam and the PetroVietnam. The need for thermo-electricity in…... [read more]

Representatives of the PetroVietnam Securities Incorporated (PSI) and the Vinacomin Power Holding Corporation told an investors’ conference on Wednesday that they were encouraged by investors’ interest shown in purchasing Vinacomin shares. Vinacomin’s Cua Ong coal extraction rig in the northern province of Quang Ninh. - VNA/VNS Photo Minh Duc Ngo Tri Thinh, general director of Vinacomin Power Holding Corporation - a subsidiary of the Vietnam National Coal-Mineral Industries Holding Corporation Ltd (Vinacomin), told more than 100 potential investors that his company is well aware of the pressure and competitive nature of the energy sector, and it strives to meet investor expectations with more effective management and operation systems. The Vinacomin Power Holding Corporation became equitised in January 2016 with VND6.8 trillion (US$302.4 million) in charter capital, under the stock code DTK on the Ha Noi Stock Exchange’s (HNX) Unlisted Public Company Market (UPCoM). The company now has 680 million common stocks trading on the UPCoM at VND14,000 ($0.6) per share, same as its preferential price in 2016. According to its 2016 financial report, the company finished with VND354 billion ($15.74 million) in post-tax income, down by 29.36 per cent from its 2015 result. The Vinacomin Power Holding Corporation is operating seven thermo-electric plants across the country, generating more than nine billion kilowatts per year. The group is considered the third largest power supplier in the growing Vietnamese power market, following Electricty of Vietnam and…... [read more]

The bottom line is that the equitisation process, no matter how it is going, will not cause any losses to State property, and that after selling shares at market prices, enterprises will be able to boost their operations. On the contrary, massive equitisation will only bring pressure to bear upon SOEs which have no option but to sell shares at lower prices without considering the consequences. Many people even make use of equitisation to sell shares at lower prices and turn a profit for themselves and their relatives rather than for the company. Our goal is to tighten and enhance the capacity of State management over SOEs. However, most SOEs are currently carrying out equitisation in an opposite direction. Equitisation must be based on the enterprises’ development strategies to help them identify areas for which they need to mobilise capital. In fact, SOEs pay more attention to selling their property than mobilising capital during the equitisation process. In addition, stake buyers also pay more attention to the company’s property than its profit-making capacity, feasibility of business strategies, and transparency in business management. There are two things that SOEs need to do during the equitisation process. First, they will be transformed into limited companies to operate under the Enterprise Law. Second, their enterprise property ownership will be changed into a new form to make State ownership more effective. In fact, we have no specific agency responsible for State ownership rights and still lack mechanisms and criteria to assess the working efficiency…... [read more]

According to statistics, by the end of 2006, the country had only 2,176 enterprises with 100 percent state capital totalling nearly VND260,000 billion. To fulfil the equitisation target by 2010, the government will equitise about 1,500 enterprises. By the end of 2010, the country will have 554 enterprises with 100 percent state capital. However, in 2007, only 82 enterprises were equitised, fulfilling 21 percent of the set target. Inappropriate intervention The slow progress of equitisation is attributed to barriers from administrative mechanisms. Lawyer Vu Xuan Tien from VFAM Vietnam Consulting Company has identified five major barriers including the improper legal framework for the equitisation process, policies for enterprises, rapid changes in the government’s regulations, difficulties in fulfilling many goals at the same time and the indifference of civil servants to businesses’ difficulties in the equitisation process. Mr Tien said some senior officials still use their power in enterprises even when they have been equitised. For example, a deputy chairman of central Khanh Hoa province’s people’s committee used his mobile phone to stop a shareholders’ meeting of the Phan Thiet Joint Stock Company, which had been implemented in accordance with the laws. Deputy Chairman of Ninh Binh province’s People’s Committee issued a document aimed at not recognising the results of the shareholders’ meeting of Ninh Binh Pharmacy Joint Stock Company. These are really inappropriate interventions into the equitisation process of enterprises. Being afraid of losing interest, senior officials cited many reasons for delaying the equitisation process. Currently, the fluctuation in the…... [read more]




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