State Capital Investment Corp (SCIC) was optimistic as it had given the positive results of diversting state capital at state-owned enterprises over the past years and meeting its target in this 2010 at a conference held recently.
In 2006, ‘the state-owned super-corporation’ only made six divestments of state capital at SOEs. In 2007, this number of SOEs that it divested reached 35, in 2008 and in 2009, this figure was in turn 59 and 238, doubling the total number sold in 3 years ago. SCIC expects to divest capital from 297 companies this year, out of the 921 state-owned enterprises that it acts as a State capital representative for.
SCIC had taken over a total 921 SOEs as of the end of March, while it received six additional companies in 2010’s first quarter.
SCIC’s investment portfolio comprised 574 enterprises as of late March, with a total book value of 11.55 trillion dong over the total chartered capital of 44 trillion dong.
According to Hoang Nguyen Hoc, Deputy General Director of SCIC, the above good result was thanks to some problems in selling state capital which had been solved by the Government and the Finance Ministry to create favorable conditions for the super-corporation to work out.
An analysis at the conference showed that not all businesses that SCIC planned divestments are ready to support and cooperation, by a fear that is placed after the sale of state capital, performance of businesses that would like? This also requires SCIC consider their responsibilities.
At the conference, Le Hoang Hai, Deputy Director of Corporate Finance under the Finance Ministry, also emphasized that divestments were active tasks assigned to the SCIC to work out, but the concern given to this unit was not required to set out for quick sale in order to “avoid” its responsibility for the value of state-owned capital, with the effective withdrawal of enterprises that it withdraws capital.
“Selling the state capital is always difficult, because the state capital is owned by the people, there is close supervision. Selling the capital must be planned and targeted, but the completed divestments must ensure no disturbance and effect the performance of enterprises. Accordingly, the divestments must determine their actual operation, and what is the best time to make good divestments to help businesses operate better, “said Hai.
Hai commented that SCIC needed to develop a mechanism to encourage the promotion of securities companies and expand investors participating in the divestment process, just to create a competitive environment to have high quality investors for businesses and better conditions to raise the capital value of the state.