Transport Minister seeks permission to select best strategic investor for enterprises undergoing equitization.
Minister of Transport Dinh La Thang has proposed the Prime Minister permit the Ministry of Transport (MoT) to select one strategic investor to take on all of the State stake in State-owned enterprises (SOEs) under MoT yet to be equitized. Accordingly, MoT would prefer to sell all of the State stake in the Vietnam Motors Industry Corporation (Vinamotor) to a single investor.
“We will set out specific conditions, including the investors’ financial capacity and their expertise in the business to select the best,” the Minister told a preliminary meeting on SOE equitization on March 26. “This would help the operation of the enterprises post-equitization.”
The auction of small blocks of shares would not attract the participation of large investors, who may prefer to seek a majority stake, leading to difficulties in implementing businesses strategies in equitized enterprises in the future. “The State will no longer have to be concerned about losses during the equitization process,” the Minister added.
According to the Chairman of the State Securities Commission (SSC), Mr. Vu Bang, this would also be applied at the State Capital and Investment Corporation. “The government should allow ministries to do the same or pilot it at first,” he recommended.
According to a report from the Steering Committee for Innovation and Development of SOEs under the government, no guidance in the policy for selling the entire State stake in SOEs is a major challenge that has created obstacles in the equitization process.
There are four domestic enterprises expressing interest in becoming strategic investors in Vinamotor: Sacom Wires and Cables Co. (Sacom), Vietnam NA Motor Co. (Vinamco), the Thanh Cong Ninh Binh Auto JSC (TNA) and the TMT Motor JSC (TMT). Except for Sacom, all specialize in automotive businesses and services.