SOE equitisation slow this year due to COVID-19

The outbreak of COVID-19 in many localities has delayed the equitisation of State-owned enterprises (SOEs).

The headquarters of Mobifone, an equitised SOE. Only three SOEs have been equitised since the beginning of this year. — Photo vov.vn

According to the Corporate Finance Department under the Ministry of Finance, the Prime Minister approved a plan on equitising 128 enterprises in the 2017-2020 period. However, only 39 of them completed equitisation, reaching 30 per cent. The remaining 89 businesses was scheduled to be equitised this year.

Since the beginning of the year, only three enterprises have been equitised but they were not on the list of 89 enterprises as planned.

The Ministry of Finance has admitted that it is difficult to implement the equitisation of enterprises in 2021.

Tien said that many SOEs had not completed the legal procedures on realignment and handling of real estate before equitisation according to regulations on the rearrangement and handling of public property. There were still many financial problems and others to be solved.

In addition, according to the department, the implementation of equitisation and divestment has depended on the market. It has meant choosing a reasonable time to sell shares. Therefore, the equitisation and divestment of enterprises every year have not reached the results as targeted.

Especially, according to Tien, the COVID-19 outbreak in many localities, including Ha Noi and HCM City, has affected the valuation of enterprises and state capital at SOEs.

The two largest cities have a large number of businesses under equitisation, accounting for 60 per cent of the number of SOEs that had not been equitised under the plan in the 2016-2020 period.

Therefore, the progress of equitisation this year has depended on the control of COVID-19 nationwide with two scenarios, according to the department.

 

The first scenario is that by the end of the third quarter of 2021, the pandemic is basically under control in Viet Nam. With this situation, some localities would ease restrictions and they would focus on implementing the divestment of enterprises' state capital held by the State Capital Investment and Trading Corporation (SCIC) by listing on the stock exchange.

The second scenario is that the pandemic lasts until the end of 2021. In this situation, due to social distancing measures in some large localities, the implementation of equitisation and divestment cannot be carried out.

Based on the current situation of the COVID-19 pandemic, the department forecasts that the equitisation this year will not be implemented as planned to fetch VND40 trillion for the State budget.

However, economic expert Nguyen Minh Phong said slow equitisation was better than rushing because it would cause more losses. In fact, a number of large SOEs such as Saigon Beer-Alcohol-Beverage Corporation (Sabeco) and Joint Stock Corporation of Beer-Alcohol-Beverage Hanoi (Habeco had that problem.

Phong said in order to overcome limitations when implementing the equitisation of SOEs, the State needed clear solutions, especially in price calculation.

According to the department, in the 2016-2020 period, 180 enterprises were equitised with a total value of about VND490 trillion, including state capital of VND233.8 trillion.

The SCIC is expected to divest capital from six major enterprises in the first quarter of next year, fetching between VND15 trillion and VND20 trillion (US$652-870 million) for the State budget.

Source: VNS

Finance ministry turns to stock market for greater transparency in SOE equitization

Finance ministry turns to stock market for greater transparency in SOE equitization

This would be the first step for Vietnam’s state firms to list shares on international stock exchanges.

 
 

Other News

.
Flower farmers do not dare grow large quantities for Tet amid Covid uncertainty
Flower farmers do not dare grow large quantities for Tet amid Covid uncertainty
BUSINESSicon  19/11/2021 

Many flower and bonsai farmers in HCM City and the Cuu Long (Mekong) Delta have reduced production for Tet (Lunar New Year) which falls early next year since they are worried the COVID-19 pandemic will affect demand.

Global energy crisis: another concern for Vietnam's economy
Global energy crisis: another concern for Vietnam's economy
FEATUREicon  19/11/2021 

Disrupted coal mining in Ordis in Inner Mongolia, the most important coal mining hub in the world, is posing huge risks that could stifle global growth.

Too many traceability apps confuse farm-produce buyers
Too many traceability apps confuse farm-produce buyers
FEATUREicon  19/11/2021 

The farm produce traceability system in Vietnam still doesn’t match GS1 standards (the most widely used system of standards in the world), and, as such, the existing traceability apps are just for internal use.

More businesses seek black credit as cash flow plummets
More businesses seek black credit as cash flow plummets
FEATUREicon  19/11/2021 

Seventy-one percent of businesses anticipate revenue decreases in 2021, higher than the 65 percent figure in 2020, according to a survey.

Overspend in the works for reboot of national economy
Overspend in the works for reboot of national economy
BUSINESSicon  19/11/2021 

Vietnam may not be able to increase its budget deficit next year in order to ensure state budget spending, with the economy still sabotaged and business revenues still dented.

Captivating incentives target FDI from Europe
Captivating incentives target FDI from Europe
BUSINESSicon  18/11/2021 

Vietnam will continue considering foreign investment one of its important drivers for socioeconomic development over the next four years, with its ambitious plan to attract more high-quality funding. 

VN to strengthen financial foundation in the next ten years
VN to strengthen financial foundation in the next ten years
BUSINESSicon  19/11/2021 

Vietnam's top priority for 2021-30 is to build a financial foundation for the country's sustainable development, said policymakers and experts during a conference to discuss finance strategy for the 2021-30 period.

Pandemic makes 85 percent of Vietnamese consumers more likely to use digital banking in future
Pandemic makes 85 percent of Vietnamese consumers more likely to use digital banking in future
BUSINESSicon  18/11/2021 

Around 85 percent of Vietnamese banking consumers are more likely to use online and digital banking services compared to 18 months ago, according to a new report from SaaS cloud banking platform Mambu.

Food shopping trends change due to social distancing
Food shopping trends change due to social distancing
BUSINESSicon  18/11/2021 

The way people buy food in HCM City has changed after a period of social distancing amid the COVID-19 pandemic, with more food products bought online, according to online sellers.

The cost of reopening the economy
The cost of reopening the economy
FEATUREicon  18/11/2021 

Nearly two months have passed since Ho Chi Minh City and 18 southern provinces have lifted lockdown measures and set up the "new normal", with the operations of people and enterprises gradually resuming.

More gyms close as membership dwindles
More gyms close as membership dwindles
FEATUREicon  18/11/2021 

More and more gyms have shut down or have been transferred to others, sometimes for free.

Coffee, vegetable industries agree on codes of conduct to encourage sustainability
Coffee, vegetable industries agree on codes of conduct to encourage sustainability
BUSINESSicon  17/11/2021 

As many as 42 enterprises from the coffee and fruit-vegetable industries have signed a pledge to show their commitment to support and implement the codes of conduct (CoCs) 

Pandemic will have long-lasting impact on business operations in Vietnam
Pandemic will have long-lasting impact on business operations in Vietnam
BUSINESSicon  17/11/2021 

Many factories, including about 200 contracted factories that make sportwear for Nike Corporation, resumed production in Vietnam earlier this month. 

Hoa Binh: attractive destination for investors
Hoa Binh: attractive destination for investors
BUSINESSicon  04/11/2021 

In an effort to attract investment, especially from the start-up community and young entrepreneurs, the authorities of Hoa Binh province have issued special incentive policies.

VIETNAM BUSINESS NEWS NOVEMBER 18
VIETNAM BUSINESS NEWS NOVEMBER 18
BUSINESSicon  18/11/2021 

Fee reductions extended until June 2022

Vietnam to attract more investment in seaport development
Vietnam to attract more investment in seaport development
BUSINESSicon  17/11/2021 

Vietnam will need about 313 trillion VND (13.7 billion USD) to develop a modern seaport system between now and 2030, and the funding will mostly come from non-budget sources.

VIETNAM BUSINESS NEWS NOVEMBER 17
VIETNAM BUSINESS NEWS NOVEMBER 17
BUSINESSicon  17/11/2021 

Shares retreat on selling pressure, liquidity remains high

Vietnam Airlines officially receives FAA permit to run direct flights to US
Vietnam Airlines officially receives FAA permit to run direct flights to US
BUSINESSicon  16/11/2021 

National flag carrier Vietnam Airlines on November 16 officially received a permit from the US Federal Aviation Administration (FAA) to operate non-stop commercial flight service between Vietnam and the US.

Vietnam, Israel look toward bilateral FTA next year
Vietnam, Israel look toward bilateral FTA next year
BUSINESSicon  17/11/2021 

Vietnamese Minister of Industry and Trade Nguyen Hong Dien has hailed Israel as a promising market of Vietnam in West Asia.

Economic recovery: businesses can find their own way with new policies
Economic recovery: businesses can find their own way with new policies
BUSINESSicon  17/11/2021 

Economic expert Pham Chi Lan said that financial solutions to support pandemic-affected businesses this year have not yet learned from the irrationalities of 2020. 

 
 
 
Leave your comment on an article

OR QUICK LOGIN