HA NOI (VNS) — In a bid to spark flagging investor interest, the Government allowed the selling of shares in state-owned enterprises in at least five per cent stakes, the Prime Minister said earlier this week.
The Government is trying to reach its goal of privatising 432 SOEs in 2014-15 period. By the end of June, just 204 had been sold off.
State stakes will be divided into packages for auction, according to the decision, adding only share package could be sold per auction. Previously, investors could buy stakes of less than 5 per cent.
The decision reiterated that both domestic and foreign investors could buy unlimited stakes, except in sectors with established caps on holdings of foreign investors.
Even before the decision was officially issued, Deputy Prime Minister Vu Van Ninh gave nod to application of the sale in share packages of Government stakes in a number of companies, including Cienco 5, Cienco 6, Transport Investment and Development Jsc., Hai Van Nam Hotel, Railway Material Equipment Import Export Joint Stock Company, Dong Mo Quarry Company, Railway Material Joint Stock Company.
Restructuring of SOEs was one of three pillars of the country's economic restructuring, besides the financial markets and public investment.
This week's decision stipulated the divestment of State capital out of joint stock companies which had not been listed on the two national exchanges or registered trading on UpCoM (unlisted public company market).
The sale of Government stakes must be implemented through auctions on exchanges based on approved plans. The plans must include the number of share packages, the number of shares in a package, the starting price, the criteria of participant investors and backup plans in case the auction goes unsuccessfully.
The appointed sale of share packages needs approval of the Prime Minister.
Investors qualified to participate in auctions must be those with adequate financial capacity and commit to the long-term development of SOEs.
Those regulations aimed at ensuring transparency in auctioning, prevent problems such as corruption or causing losses to the State capital as well as promote the development of SOEs towards efficiency. — VNS