Government to boost non-core divestment
VietNamNet Bridge – The Government will release a resolution stipulating some special measures to help State-owned groups and corporations to quickly withdraw their investments from non-core sectors, said Deputy Prime Minister Vu Van Ninh.
Speaking at an online meeting with local authorities on Monday, Ninh said that losses will pile up at ineffective non-core businesses, so the Government will allow State-owned enterprises (SOEs) to offload the investments quickly.
The Government expects to release the resolution in January, 2014, in a bid to speed up the current stagnant non-core divestment process of SOEs.
Ninh said that 100% of SOEs restructuring plans within competence of local authorities and agencies have been approved. For economic groups and corporations, the Government has almost finished the job while only one group has yet to be approved.
Dang Quyet Tien, deputy director of the Enterprise Finance Department under the Finance Ministry, said that economic hardship has hindered the non-core divestment process. It is difficult to find partners for stake transfer, especially in the real estate, financial and securities sectors.
In some circumstances, a loss is likely to occur during divestment process. Therefore, enterprises are afraid of bearing responsibility and only conduct divestment plans upon the market recovery.
Some SOEs have yet to focus on divestment. They have yet to consider the process as an important measure to restructure businesses, Tien said.
In fact, having made non-core investments, enterprises have met troubles in divestment. For instance, the Law on Securities has stipulated the lock-up period and subjects for share transfer.
To help SOEs speed up non-core divestment, the new resolution will allow SOEs to divest capital below the par value after setting up reserve funds for the investments as required.
In addition, enterprises transferring stakes in unlisted enterprises with a value from VND10 billion will have no need to auction via stock exchanges. Enterprises will be allowed to choose intermediary financial organizations (securities firms) to organize auctions or hold biddings by themselves.
Notably, SOEs will be allowed to offer stakes in public enterprises even though the public firms are making losses.
State Capital Investment Corporation will consider buying financial investments made by SOEs if they fail to divest capital given these measures.