Vietnam Post and Telecommunications Group (VNPT) has divested its capital at 16 enterprises with total proceeds of over VND1 trillion ($44 million).

The second-largest telecommunication group divested its capital at 16 enterprises with a value of VND602 billion ($26.4 million) out of over VND2 trillion ($88 million) investment capital.

Divestment at subsidiaries has faced many obstacles, especially enterprises in the construction sector, according to VNPT’s Chairman Mr. Tran Manh Hung. “VNPT has not yet completed divestment as directed by the Prime Minister,” he said.

Relating to the Financial Post Company, VNPT plans to transfer its capital to financial institutions. The plan was submitted to the Ministry of Information and Communications (MIC) and State Bank of Vietnam.

For VNPT’s capital at Maritime Bank, the divestment at institutions is complicated because of many special requirements. VNPT, therefore, creates the solutions to divest at the direction of the State. Mr. Pham Dinh Trong, Head of Enterprises Management Department under MIC said that the divestment at institutions has faced many difficulties and slowed down.

“As directed by the Prime Minister, VNPT should have completed its divestment in 2015,” said Mr. Trong. “VNPT, therefore, has to make plans to divest its capital at banks and 50 other enterprises.

Mr. Le Nam Tra, Chairman of MobiFone said that its divestment at the two banks is also facing many difficulties because there are not any investors buying shares at Seabank. TPBank, meanwhile, has just six investors participating in buying the bank’s shares.

In August, VNPT proposed that 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 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 resources,” a VNPT leader said at the meeting with Prime Minister Nguyen Xuan Phuc on August 4.

MobiFone’s latest financial report in November revealed that the official value of its investment in the Audio Visual Global JSC (AVG) was VND8.9 trillion ($400 million) and was the only investment it made in the first half of this year.  

As at June 30, long-term financial investments, including investments in subsidiaries, associated companies, and other long-term financial investments, soared from VND642 billion ($28.9 million) at the beginning of the year to VND9.45 trillion ($425.2 million).

The AVG investment is equal to 55 per cent of the group’s equity capital of $729 million and nearly 40 per cent of its total assets of $1.04 billion as at June 30. In addition to AVG, MobiFone also has investments in subsidiaries such as MobiFone Service, MobiFone Plus, and MobiFone Global.

MobiFone made the headlines in August when Deputy Prime Minister Truong Hoa Binh officially decided to conduct a comprehensive inspection into its purchase of 95 per cent of AVG. He assigned the Government Inspectorate to work with relevant agencies to conduct the inspection, with sanctions available under law to be applied if any legal violations were uncovered.

Although the timeframe for the inspection has now lapsed the official results are still to be released. In the first six months of 2016, MobiFone’s revenue reached VND16.2 trillion ($736.3 million), up 16.6 per cent year-on-year, while after-tax profit was VND2.51 trillion ($112.1 million), down 21 per cent.

It plans to earn VND33.1 trillion ($1.48 billion) in revenue and VND4.16 trillion ($186.5 million) in after-tax profit for the year as a whole and to contribute VND4.6 trillion ($206.2 million) to the State budget.

VN Economic Times