SOE equitisation likely to fall short of annual target

Update: July, 26/2018 - 09:00
A view of the Vũng Áng Thermo Power Plant No.1 in central Hà Tĩnh Province. — VNA/VNS Photo
Viet Nam News

HÀ NỘI — The equitisation of State-owned enterprises (SOEs) is unlikely to meet this year’s target, as only 19 SOEs had completed the process by the end of June.

Việt Nam plans to complete the equitisation of 85 SOEs this year.

The statement was made by Deputy Prime Minister Vương Đình Huệ, head of the Government Steering Committee on Corporate Renovation and Development.

Huệ chaired a meeting in Hà Nội on Wednesday to review SOE restructuring in the first half of 2018 and to launch tasks for the remaining months of the year.

According to a report by the Steering Committee, the total value of the 19 enterprises approved for equitisation was VNĐ40.7 trillion (US$1.76 billion), of which VNĐ23 trillion belonged to the State.

Following equitisation, the firms were expected to have combined charter capital of more than VNĐ22 trillion. The State holds 58.83 per cent of that amount, while 40.66 per cent was sold to strategic investors and 0.51 per cent was sold to employees.

Of them, 16 firms launched initial public offerings (IPO), earning VNĐ22.5 trillion, 4.5 times higher than the total IPO revenue of 2017.

Among those 16 enterprises were a number of large-scale enterprises such as the PetroVietnam Power Corporation (PV Power), the Việt Nam Oil Corporation (PV Oil), Bình Sơn Refining and Petrochemical Company (BSR), the Việt Nam Southern Food Corporation, the General Electric Corporation 3 and the Hà Nội Trade Corporation (Hapro).

Regarding State capital divestment, the country reaped VNĐ5.6 trillion from 42 SOEs in the first six months of this year.

The Steering Committee also reported that the number of newly-established enterprises in the first six months of this year was more than 64,500, an increase of 5.3 per cent over the same period in 2017.

The total registered capital of newly-established enterprises reached nearly VNĐ650 trillion, up 8.9 per cent over the same period in 2017.

More than 6,600 enterprises dissolved or filed for bankruptcy in the first six months, an increase of 21.8 per cent year-on-year.

The total number of businesses turning inactive and awaiting dissolution was more than 34,800, up by 48 per cent against 2017. Meanwhile, the number of enterprises being temporarily suspended was nearly 18,000, an increase of 25.1 per cent year-on-year.

Slow privatisation in HCM City and Hà Nội

According to the initial plan, HCM City had to equitise 39 enterprises, while the figure for Hà Nội was 11, but until now, not a single firm had equitised out of the cities’ lists.

The hand-over of privatised enterprises to the State Capital Investment Corporation was also slow, while registrations to list on the stock market had not been strictly implemented.

Deputy PM Huệ attributed the sluggish progress of SOE equitisation to the ministries, branches and localities’ lack of drastic measures to achieve the target.

Huệ emphasised the importance of greater efforts in the last six months to complete the equitisation plan for 2018. — VNS