Part 2: Divesting and equitising EVN: difficulties due to participation of too many agencies

	Making effort to promote equitization and divestment at the end of the period
	Equitization and capital divestment: Knowing hard but still slow
	Deal with equitization and divestment in State enterprises

EVN will basically accomplish the target of divestment in 2019. Photo: Nguyen Thanh.

Complete divestment in 2019

Nguyen Xuan Nam - Deputy General Director of EVN said in the period of 2011-2015, EVN has completed all the goals and tasks of restructuring under the direction of the Prime Minister. The Group completed divestment in 100 percent of enterprises not related to the main business lines of EVN. In addition, EVN completed the capital reduction at EVN Finance in accordance with the provisions of the Law on Credit Institutions, thereby collecting more than VND 2,044 billion, a capital surplus of VND 64 billion, preserving and developing EVN's investment capital. EVN has also completed the restructuring of its enterprises towards specialisation in electricity generation stages, focused on the key business lines of EVN.

For 2016-2020, according to Nam, EVN has completed many important targets and tasks in equitisation and divestment. Specifically, EVN completed the transformation of EVNGENCO 3 to operate as a Joint Stock Company model since October 1, 2018. After that, shares of EVNGENCO 3 (stock code PGV) were traded on UpCom stock exchange. It has also completed divestment and reduction of capital in two enterprises out of six enterprises subject to divestment under the Prime Minister’s Decision No. 852/QD-TTg approving the master plan on restructuring enterprises under EVN in 2017-2020, collected more than VND 296 billion and capital surplus of nearly VND 63 billion.

Recently, on August 23 2019, 16.25 million shares of a total 18.75 million shares of EVNFinance owned by EVN were auctioned at the price per share of VND 13,480, EVN collected VND 219.05 billion. Currently, EVN holds only 2.5 million shares in EVNFinance, equivalent to 1 percent of charter capital in this company.

For the plan in the future, EVN has deployed divestment in the remaining businesses, with the goal of basically completing divestment in 2019. Besides, all member enterprises and associated enterprises in the group, which meet all conditions and have registered to list and trade on the stock market and have a market capitalisation much higher than the value of the owner's equity.

Shortcomings due to many participants

According to EVN, the group has submitted written reports to competent authorities to consider and approve contents related to equitisation and divestment.

In a report on the restructuring and renovation of enterprises, equitisation and divestment sent to the State Capital Management Committee in May, EVN stated that the Prime Minister and ministries and sectors have considered difficulties and problems and have not yet given instructions to EVN for implementation. Specifically, for the divestment, the plans and roadmap of divestment in five joint stock company which EVN submitted to the State Capital Management Committee since October 2018, there are three plans that have expired the valuation certificate including: EVNFinance, Thuan Binh Wind Power Joint Stock Company (EVN TBW) and the General Corporation. Dong Anh Electrical Equipment Joint Stock Company (EEMC). EVN will have to hire a second valuation consultant, therefore, it will prolong the time and raise costs and procedures for divestment.

Many agencies (Ministry of Finance, Ministry of Planning and Investment, Ministry of Justice, State Capital Management Committee in Enterprises, Government Office) participated and gave comments during the implementation, and due to different understanding of legal documents and decisions of the Prime Minister. EVN also said that “the research and settlement of the ministries, branches and the State Capital Management Committee in enterprises take a long time. Normally, it takes more than one month for comments, even it takes nearly five months for instruction of a divestment plan, making EVN lose opportunities when the stock market flourishes, consuming more time and cost for stock valuation.”

For the equitization, EVN has analysed each case. Specifically, the equitisation of EVNGENCO 2 has risk of delay because the State Capital Management Committee at enterprises has not approved the equitisation plan and the expenditure estimate for the equitisation and has not selected consulting on valuation of enterprises. If there are no official dispatches or decisions for approval and instruction, the announcement of the value of EVNGENCO 2 will not meet the requirements. In addition, EVNGENCO 1 and the finalised equitisation plan of the equitisation of EVNGENCO 3 are waiting for the comments of the State Capital Management Committee at enterprises and the Prime Minister.

EVN proposed to the State Capital Management Committee at enterprises to consider and direct EVN on the equitisation finalisation of EVNGENCO 3, and reported to the Prime Minister for approval of the adjustment of the enterprise valuation time for the equitisation of the Parent Company-EVNGENCO 1 (expected at 0h on January 1, 2020) and approve the transfer of the investor of the Duyen Hai 3 Thermal Power Plant project expanded from EVN to EVNGENCO 1 after the project was completed and put into commercial operation; consider and comment on EVNGENCO1's arrangement and handling of real estate in Lam Dong province.

EVN also proposed to the State Capital Management Committee at enterprises to consider and approve the equitisation plan of EVNGENCO 2 and issue an official document soon to the State Audit regarding the registration of the plan on auditing and result of enterprise valuation for the equitisation of the parent company-EVNGENCO 2.