SCIC equity to increase tenfold: Decree

Update: June, 19/2014 - 09:02

HA NOI (VNS)  — The State Capital Investment Corporation (SCIC) will have a charter capital of VND50 trillion, or US$2.38 billion, 10 times more than the current level.

The increase is mentioned in Decree No 57/2014/ND-CP regulating SCIC operations which was issued on Monday and will take effect on August 6.

The corporation, with State-invested equity, is assigned to manage the State capital in enterprises entrusted by ministries and ministry-level agencies, as well as the People's Committee of provinces and cities directly under the central government.

It is their responsibility to preserve the investments, and maintain profitability and improve capital management efficiency at the enterprises. It is also supposed to implement other Government-assigned tasks involved in company organisations, privatisation, financial consultancy, and merger and acquisitions.

The SCIC will have to be dissolved if it suffers losses in three consecutive years, or fails to complete the missions within two years.

The SCIC last year obtained VND4.5 trillion, or $214.28 million, in pre-tax profits, 6 per cent higher than the annual target and up 23 per cent over the previous year. It contributed nearly VND1.8 trillion, or $85.71 million, to the State budget in 2013.

Under a restructuring plan for the SCIC until 2015, issued by the Government last December, the corporation will have to divest from 376 enterprises while retaining long-term investments in four businesses, including FPT Telecom, Vinamilk, Hau Giang Pharmaceutical and Viet Nam National Reinsurance Corp.

While the scheme aimed to boost economic efficiency, recent media reports said the corporation was facing significant challenges in divestments due to unfavourable stock market developments. — VNS