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MoF department pushes change in brewers' equitization

Released at: 16:16, 28/09/2017

MoF department pushes change in brewers' equitization

Illustrative image (Source: cafebiz.vn)

Department of Corporate Finance believes MoIT should lose responsibility for equitization of Sabeco and Habeco if the process doesn't proceed at a faster pace.

by Quang Huy

The Ministry of Finance (MoF)’s Department of Corporate Finance on September 27 suggested transferring responsibility for the equitization of two State-owned brewers if the Ministry of Industry and Trade (MoIT) does not publish prospectuses by the end of the month.

The Saigon Beer Alcohol Beverage Corp. (Sabeco) and the Hanoi Beer Alcohol and Beverage Corp. (Habeco) hold 60 per cent of Southeast Asia’s largest beer market by volume consumed. They have both drawn interest from foreign brewers such as the Netherlands’ Heineken and Japan’s Kirin, Sabeco’s former CEO Mr. Le Hong Xanh said.

The pair were earmarked for equitization almost a decade ago as part of a nationwide program to trim holdings in State-owned enterprises, many of which have low profitability. But progress has been slow given the small stakes on offer, the sizable State control, and concerns about vested interests.

Only with a change in government last year has progress been made with Sabeco and Habeco, with the MoIT - which holds shares in the brewers on behalf of the State - hiring advisors, listing the firms, and targeting a 2017 sale.

The Department of Corporate Finance waded in with an unusually public push. “The complete sale of State capital in Habeco and Sabeco must be fulfilled to ensure money is transferred to the Foundation to Support the Arrangement and Development of Enterprises before December 1,” the department said in a report on equitization and divestment.

If prospectuses are not published by September 30, then the State’s shares should be transferred from MoIT to the MoF’s State Capital Investment Corp. (SCIC), the government’s investment arm, the department said.

“The transfer will ensure a faster pace of divestment, as SCIC is an organization specializing in divestment and will simultaneously help MoIT focus on completing State management tasks,” the department wrote in the report.

The department would ordinarily submit any such suggestions to higher up within MoF for further consideration.

MoIT holds 89.6 per cent of Sabeco and 81.8 per cent of Habeco, together worth VND168.8 trillion ($7.43 billion) at market value. MoIT did not immediately respond to a request for comment.

The government aims to fully divest from the brewers by the end of the year. The Prime Minister has approved a plan to sell 53.59 per cent of Sabeco, foreign newswire Reuters reported, while Danish brewer Carlsberg wants to increase its stake in Habeco to at least 51 per cent from the current 17 per cent.

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