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City failing to meet SOE equitisation goal

Update: November, 25/2014 - 08:55
Workers work in sausage production line at a factory of Saigon Trading Group (Satra). The enterprise has equatised since 2000 and transformed 30 state-owned companies into joint stock firms. The People's Committee has admitted that HCM City is unlikely to achieve the year's target for equitising state-owned enterprises. — Photo satra.com.vn
HCM CITY  (VNS )— HCM City is unlikely to achieve the year's target for equitising State-owned enterprises, the People's Committee has admitted.

The Government's plan to equitise 432 SOEs this year and next includes 31 in the city, which have to be converted into shareholding companies, and the city had planned to equitise 15 this year.

But a recent People's Committee meeting on SOE restructuring heard that the city would be unable to achieve its equitisation plan for this year. Of the 15 firms earmarked for equitisation, only three have so far made initial public offerings (IPOs): Sai Gon Cultural Products Corporation, Tan Hoa Water Supply Company, and Trung An Water Supply Company.

Of the rest, 10 have had their equisation plans approved while one each is in the process of valuation and having equitisation plans considered for approval.

Huynh Trung Lam, deputy head of the HCM City Board of Management Renovation, told Dau Tu Chung Khoan (Securities Investment) magazine that there are indications the remaining IPOs would also be launched successfully.

Speaking about the reasons for failing to achieve the SOE equitisation target, many participants told the meeting that the biggest difficulty relates to SOEs' investment in non-core sectors.

People's Committee Chairman Le Hoang Quan said the restructuring process remains tardy because there is little demand for the shares of equitised SOEs.

But he underlined the city's determination to complete the equitisation as planned, with all the SOEs converted into shareholding companies by 2017 at the latest.

The city has urged SOEs to sell off their investments in non-core sectors.

The investments they have to pull out are estimated at VND4.82 trillion (US$226.72 million) in the 2014-15 period, of which VND1.13 trillion is planned for the fourth quarter of this year. — VNS

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