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VietNamNews

EVN forecasts big gains from divestments

Update: July, 24/2012 - 10:36

HA NOI — Electricity of Viet Nam (EVN) expects significant capital gains when it divests from the insurance and real estate sectors in compliance with the Prime Minister's order that State-owned enterprises focus investment solely on core lines of business by 2015.

EVN deputy director Dinh Quang Tri has confirmed that the group has VND1.1 trillion (US$52.3 million) invested in insurance and real estate, as well as VND757 billion ($36 million) invested in An Binh Bank, amounting to a 20-per-cent interest in the lender.

EVN has proposed selling its stake in the bank to the Geleximco Group at a price of VND10,000 per share, Tri said.

"The stock's price on over-the-counter (OTC) market has been very low, at around VND7,000 to 7,200 per share," he noted.

EVN also holds a 22.5-per-cent stake in the Global Insurance Co (GIC), worth an estimated VND125 billion ($5.9 million). To comply with the Prime Minister's order, EVN has targeted to reduce its holdings in GIC to less than 20 per cent by 2015.

ERGO, a leading German insurance group, has expressed interest in increasing its percentage at GIC and has been in negotiations with EVN, Tri confirmed, noting that ERGO originally acquired GIC stock at VND40,000 per share and that the Ministry of Finance would have to receive approval to own more than 20 per cent of a Vietnamese insurance company.

In real estate, EVN has invested VND103 billlion ($4.9 million) in Central Real Estate Co and Sai Gon Real Estate Co. If EVN were to divest from Central Real Estate, the company would have to sell its land holdings to buy back shares, bringing a huge capital windfall to EVN, Tri said.

EVN has not found a buyer for its stake in An Binh Securities Co since the stock market has been stagnant. Tri expected a buyer would be found by 2015, as the market improved. — VNS

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