Divestment of State stakes expected to speed up in second half

10-Aug-2018 Intellasia | The Saigon Times | 6:02 AM Print This Post

The divestment of State stakes in State-turned-shareholding companies is expected to accelerate in the second half of this year as the Ministry of Finance has just issued a new circular to create a full-fledged legal corridor for this endeavor, local media reported.

Many corporations and groups, including the State Capital Investment Corporation (SCIC), have been waiting for the circular to proceed with their planned divestment of State stakes, said Nguyen Duc Chi, board chair of SCIC.

Chi was quoted by news website VnEconomy as saying this morning, August 8, that the new circular issued by the Ministry of Finance provides specific guidelines on the management and divestment of State stakes in enterprises. Earlier, numerous enterprises had to put their divestment plans on hold after the issuance of government Decree 32 in March this year that sets new regulations on divestment.

Chi remarked that numerous successful deals regarding the transfer of State stakes with foreign involvement were recorded in 2017 and the first few months of this year. However, SCIC as well as other major corporations had to suspend their divestment plans in the second quarter after the issuance of Decree 32, pending the guidance circular to provide sufficient legal ground for continuing the process.

Chi asserted that divestment schemes will be fast-tracked in the year’s second half, as relevant organisations have prepared for their schemes while pending the issuance of the circular.

“SCIC has had all steps prepared beforehand, like signing contracts with price evaluation entities and other relevant technical processes so that when the circular is issued, all such processes will be adjusted to allow for rapid sales of State stakes,” Chi is quoted as saying in the news site.

He revealed SCIC will soon divest State stakes in major corporations like Vinaconex and Vinacontrol. Alongside SCIC, many other entities, especially banks, have also prepared their plans to divest State stakes.

“For example, Bank for Foreign Trade of Vietnam (Vietcombank) has been working with potential investors and hiring evaluation consultants to prepare for its scheme to sell a 10 percent stake, while Bank for Investment and Development of Vietnam (BIDV) unveiled its scheme to sell shares to investors early this year, but they have to wait for the new legal guidance to proceed with their schemes,” Chi said.

Divestment of State ownership at companies this year has been dragging its feet, according to a report on Dau Tu. In the first half of this year, relevant ministries and localities managed to divest State capital from a mere 10 enterprises compared to a huge target of 181 enterprises, the news site reported.



Category: Stocks, Vietnam

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