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PetroVietnam plans restructuring

Update: March, 02/2012 - 10:13

HA NOI — PetroVietnam (PVN) is in the process of completing its draft restructuring plan for submission to the Prime Minister by the March 31 deadline.

Under its restructuring plan, in addition to improving corporate governance, PVN will scrutinise its business strategies to focus on key business activities and plan for divestment from non-core-business fields.

PVN will also boost the equitisation of its affiliates, exclusive of those involved in mineral resource exploitation, and list the companies on the stock market to minimise their dependence on bank credit.

The finance ministry said it would work with the PVN to streamline policies that would ease the securities market listings.

Deputy head of the Government Office and vice chairman of the Steering Committee on Business Renovation and Development Pham Viet Muon said the Government had requested economic groups to submit restructuring plans that were focused on core businesses and to plan for divestment from non-core business fields such as banking, real estate development, insurance and securities before 2015. Equitisation of companies was expected to be completed before 2020.

Once operations were totally focused on core businesses, with improved corporate governance, equitisation plans could be carried out more smoothly, Muon said

State-owned enterprises (SOEs) account for only 1 per cent of the total number of domestic businesses but they hold about 39 per cent of total State capital, 45 per cent of total fixed assets and 27 per cent of total outstanding bank loans.

This allocation of resources is not commensurate with their operational efficiency, meaning they have a lower return on capital than other sectors.

By 2015, the country is expected to have only 692 SOEs that remain wholly State-owned, mostly key economic groups, corporations and major companies involved in fields dominated by State investment. The figure is targeted to be reduced to 100 by 2020. — VNS

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