Photos: Duc Anh/VGP
Group puts forward proposal at meeting with government.
VNPT has proposed the government allow it to own a 20 per cent stake in MobiFone.
In 2014 VNPT officially transferred ownership of MobiFone to the Ministry of Information and Communication (MIC). MIC has said it would be equitized before the expected time of July 2016 but that deadline has now passed.
MobiFone is now a one member limited liability company, with the State holding 100 per cent of its charter capital of over $703 million.
It also asked for permission to make full use of the future amount from re-selling its stake in MobiFone once it has completed an IPO. “This would strengthen VNPT’s capital sources,” VNPT leader said at the meeting with Prime Minister Nguyen Xuan Phuc on August 4.
“The Ministry of Information and Communications will compile plans to equitize MobiFone and submit it to the government for consideration,” the PM told VNPT leaders at the meeting.
Government leaders have asked VNPT to continue its complete divestment from non-core business lines. Chairman Tran Manh Hung said that VNPT has divested from 15 businesses and brought in VND602 billion ($27 million), approximately 31 per cent of total capital to be divested, which is valued at more than VND2 trillion ($90 million).
Mr. Hung said the group’s organizational structure has been streamlined from 500 to 300 employees. “The number of employees with no real capacity has been reduced significantly,” he said. “Incomes from 2014-2015 increased over 30 per cent compared to 2012-2013.”
The PM said that VNPT has restructured its activities as a model information technology and telecommunications business. “The most important thing is that State capital is preserved and developed,” the PM said. “Restructuring must not undermine State capital.”
VNPT’s process of restructuring began in early 2014 and has completed three phases.
In the first six months of 2016 its total revenue was VND61.3 trillion ($2.75 billion) and profits VND2.2 trillion ($99 million), an increase of 23.5 per cent year-on-year.
New mobile subscribers reached more than 6.4 million, an increase of 47.5 per cent year-on-year. Internet subscribers stood at 250,000, an increase of over 60 per cent year-on-year.
Revenue in 2015 reached VND36.9 trillion ($1.66 billion), for year-on-year growth of 8.29 per cent, while profits rose 1.1 per cent, to VND7.4 trillion ($333 million).
In the next five years VNPT targets profits of over VND24.1 trillion ($1.08 billion), double the figure in the 2011-2015 period. Contributions to the State budget are expected to be VND21.1 trillion ($949.5 million).
Deputy Prime Minister Truong Hoa Binh recently called for a comprehensive inspection into the deal in which MobiFone purchased 95 per cent of the Audio Visual Global JSC (AVG).
He has assigned the Government Inspectorate to work with relevant agencies to conduct the inspection, with sanctions available under law if any legal violations are uncovered.
No reason for the inspection has been given at this stage but three questions have been posed relating to the deal: its value, the transaction method (cash payment or share swap), and why MobiFone chose AVG, given its subscriber numbers are the lowest among the three satellite TV providers in Vietnam - VTC, VSTV and AVG.
In September last year MobiFone announced it had signed an IPO advisory contract with VietCapital Securities company. VietCapital Securities secured the deal after the higher price sought by Switzerland’s Credit Suisse was rejected by MobiFone. “We met with Credit Suisse but their price was too high, so we decided to select VietCapital Securities,” Mr. Le Nam Tra, MobiFone’s Chairman, was quoted by ITC News as saying at the time.