Equitisation and divestment accelerated

	Managing State capital investment in enterprises will be stricter
	Speed up equitisation and divestment progress
	Revenue collection in 2020 estimated to reach 98.3% of current appropriation, higher than the figure reported to the National Assembly

Whether Sabeco continues to divest or not while Sabeco is not as hot as in the previous period. Photo: Internet.

Careful preparation

At the end of 2016-2020, a total of 89 enterprises had not yet completed their equitisation plan under Decision 58/2016/QD-TTg, Official Letter 991/TTg-DMDN dated July October and Government Decision 26/2019/QD-TTg dated August 15, 2019. These enterprises expected to continue to implement equitisation plans. However, some units have not yet equitised such as 13 Hanoi-based firms, accounting for 14% of the plan, 38 HCM City-based enterprises, accounting for 40% of the plan, six enterprises of the Commission for the Management of State Capital at Enterprises (CMSC), and two corporations of Ministry of Construction, according to the Department of Corporate Finance, the Ministry of Finance.

The Department of Corporate Finance said it has carried out enterprise value assessment for equitisation. Notably, Power Generation Corporation 2 (EVNGENCO 2) worked with HoSE to hold an initial public offering auction on February 8. However, the department reported the number of sold shares was less than offered shares. Specifically, 580 million shares were put for auction with a value of VND10,000/share and the starting price of VND24,520/share. A total of 262,500 shares sold or 0.045% of sold shares. Of these, 210,500 shares were bought by foreign investors a the total value of VND6.4 billion.

Some large enterprises such as MobiFone, Agribank and VNPT will be equitised in this year. Also, the preparation for equitisation of large enterprises must be done carefully. When the equitisation is performed, it must be conducted drastically, said Director of the Department of Corporate Finance Nguyen Quyet Tien.

When starting equitisation, it must be completed within 18-24 months. The preparation stage needs to be implemented carefully to provide solid legal basis for enterprise's assets. This work must be paid attention to, preventing that the legal basis is not specific, leading to the equitisation being stopped. The spirit of the Government in promulgating Decree 140/2020/ND-CP is specific, when the preparation stage is done, the equitisation must be implemented within 24 monthsm” Tien said.

Calculate effectively the list of enterprises subject to divestment

Ha Long Urban Environment Joint Stock Company and Viet Tri Urban Environment and Services Joint Stock Company divested in March with a total value of VND 44.4 billion, and earned VND60.4 billion. A company of Thaison Group divested with a value of VND560 million, earning some VND560 million.

Divested capital in the first three months of 2021 was VND286.6 billion and the collected amount VND2,165 billion. Of which, three State-owned units have divested under Decision No.908/QD-TTg of the Prime Minister worth VND52.5 billion, earning VND84.1 billion. Nine firms of Vietnam Rubber Group-JSC, Viettel Group, Vietnam Education Publishing House, VNPT and Thai Son Corporation have divested with a total value of VND234 1 billion, earning VND2,081.3 billion.

The Government hopes to perform the divestment roadmap in 2021 under Decision 908/QD-TTg until the decision on approving the list of State-owned enterprises subject to divestment for 2021-2025 is issued. Basically, it is a sufficient legal basis for divestment. Decree 140/2020/ ND/CP has just been amended a number of articles, which will contribute to solving many problems for firms, Tien said.

“We believe that if the economy is not hit by the Covid-19 pandemic, the divestment progress will be completed. If the pandemic is not under control, this work cannot be implemented because it must be auctioned directly. The fact shows that many firms want to speed up divestment. The divestment must comply with market principles. This is the first requirement. The stock market is getting better, so the divestment will be more favourable. Second, the land-related issue is concerned by businesses. This issue must be transparent for effective divestment. We proposed to monitor this issue in the first quarter,” Tien said.

Divestment in the first quarter is still slow. It is proposed the Prime Minister to direct the equitisation and divestment. This performance will be attached to the responsibility of the head.

“The result of divestment in the first quarter was low. Motivated by the new method, the progress will be implemented faster and attach to the responsibility of the price assessment agency. In addition, the auction mechanism must comply with the market mechanism, so it will attract investors. However, divestment results must stick to period and market’s fluctuation and interest of investors. We have to calculate carefully for a list of enterprises subject to divestment. For example, whether we will continue to divest from Sabeco or not, because Sabeco is not 'hot' as in the previous period. We are assigning this work to the owner's representative agency, especially the Commission for the Management of the State Capital at Enterprises (SCIC). For large firms, it is necessary to consider and calculate the most effective divestment,” Tien said.