Whittling down

VNStockNews.com - Viet Nam will have just 400 State-owned enterprises (SOEs) by 2015, with steps being taken to speed up the equitisation process, Pham Viet Muon, deputy head of the Committee for SOEs Renewal and Development, has said.

At a recent meeting with the Vietnam Consultative Group (CG), he said that the Government would restructure as many as 1,000 State-owned enterprises (SOEs) from now to the year 2015, with many of them being converted into shareholding companies.

The remaining 400 SOEs would mainly comprise economic groups, corporations and large-sized enterprises involved in the country’s essential industries, national defence and security.

According to the Ministry of Finance, about 3,800 SOEs have been equitised so far and more than 1,700 SOEs have been targeted for restructuring.

Over the last two years, the equitisation of SOEs had slowed down significantly due to many difficulties including the stock market downturn, Muon said.

Experts from the Ministry of Planning and Investment, meanwhile, believe that the slowdown of the equitisation process over last years was caused by obstacles encountered in defining the value of enterprises including the value created by geographical advantages.

Evaluating the assets of major SOEs that held a lot of land and other properties was a very difficult task, they said.

Muon reiterated that the equitisation process would be speeded up based on market principles, and all related activities would be made more transparent.

He said that regulations relating to evaluation of enterprises’land-use-rights and the value of their geographical advantages would be adjusted in ways that would prevent loss of State assets.

The process by selling stakes to enterprises’ employees and strategic partners through negotiation would be implemented before they are converted into stock companies, Muon said.

Initial public offerings (IPOs) of the equitised firms would be implemented later at an appropriate time, he added.

He also stressed that the Government’s policy was not to equitise at any cost but to make the process effective.

On the equitisation of State-owned economic groups and corporations in the coming time, Muon said that State funds in these companies would be maintained, but new shares would be issued to increase their capital base.

"We encourage enterprises to find foreign strategic partners that have financial potential, good management skills, modern technology, and good marketing experience," he said.