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PM calls for full SOE equitization

Released at: 18:18, 02/09/2016

PM calls for full SOE equitization

Photo: Duc Anh

SOEs must list to fully complete the process, PM said.

by Quynh Nguyen

State divestment from a number of SOEs must be completed by them listing to protect State assets, Prime Minister Nguyen Xuan Phuc has insisted.

The State sale at Sabeco and Habeco in particular must carried out in this way and the pace of the equitization of the two big SOEs needs to be accelerated.

“Land use rights at these SOEs must be taken into account during the valuation process and there will be no discrimination between foreign and local partners,” he added.

He also asked that the enterprises retain national brands, such as the Saigon Beer, Alcohol and Beverages Corporation (Sabeco), the Hanoi Beer, Alcohol and Beverages Corporation (Habeco), and the Vietnam Dairy Products Joint Stock Company (Vinamilk) after the sale of State capital.

The sale of State shares in large enterprises is attracting a lot of attention. Sabeco and Habeco implemented equitization but the State still dominates the shareholdings at the two enterprises. State capital at Vinamilk is under 50 per cent but still has great value.

The PM asked that sales follow market practices and ensure transparency and anti-corruption by special interest groups. “Enterprises must preserve the maximum State property and the interests of the country,” the PM said. “Relevant authorities must strictly implement provisions in equitization.”

Regarding the sale of State capital in Vinamilk and other enterprises where the State Capital Investment Corporation (SCIC) represents the State, the PM asked that provisions under the Law on Enterprises and the Law on Securities be strictly implemented.

For Sabeco and Habeco, which have been equitized but are unlisted, the PM asked that they list on the stock market before State capital is sold, to ensure openness and transparency. Reputable, capable and experienced consultants must be selected for valuations to avoid inaccurate assessment and loss of State capital.

The sale of State capital in Sabeco and Habeco has been discussed many times previously. Minister of Industry and Trade Tran Tuan Anh has said that Sabeco and Habeco must speed up the sale of State holdings to cut its ownership to less than 50 per cent.

Sabeco and Habeco are Vietnam’s major beverage players, with a combined market share of over 60 per cent as at 2015. Both were equitized eight years ago but neither have conducted an IPO and listed.

Mr. Nguyen Hoang Hai, Deputy Chairman of the Vietnam Association of Financial Investors (VAFI), has said there are now three urgent tasks for the Ministry of Industry and Trade (MoIT). “The first is to direct Sabeco and Habeco to list,” Mr. Hai told VET. The second is to submit plans for the government to sell shares, and the third is to complete all handover procedures to the State Capital Investment Corporation (SCIC). “MoIT should act immediately,” Mr. Hai said.

In a document sent previously to MoIT, VAFI proposed the government divest the State’s holdings in the two largest brewers.

According to VAFI, divestment of 100 per cent of State capital in Sabeco and Habeco would be “a good choice” because it would help increase the maximum value of the two companies. But if the State continues to hold a 36 per cent stake then it continues to have veto power at shareholder meetings. The sales price of the two companies would therefore fall, as would State budget revenue.

At an MoIT meeting on July 12, PM Phuc asked it to speed up the sale of State ownership in SOEs that are under its management. “State ownership in major companies like Vinamilk, Habeco and Sabeco must be sold on a transparent basis to earn money for the State,” he said.

He added that the sale of State shares in SOEs in sectors other than power and food should be accelerated in the time to come. Private companies should be given priority for development, along with the divestment of State shares in SOEs, he said.

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