Vietnam Seeking New Share Sale Method to Speed up Privatization
The State Securities Commission (SSC) and the Ministry of Finance are working together to create a new share offering method for state-owned enterprises during their initial public offerings (IPO), the Vietnam News Agency reported.
The effort aims to make local IPOs more successful.
Companies may be allowed to sell stake to strategic partners either before or after the IPO, and the share's price in these deals is independent of the average winning price in the IPO.
Currently, a firm must conduct IPO first to define average winning price for next share sales to strategic partners.
Current IPO regulations have not helped local firms acquire suitable strategic partners who can help them with administrative governance after privatization, the Ministry of Finance said. The process of share sale has therefore been slower than initial plans.
“Almost all privatized state-owned firms are small and medium-sized enterprises. Meanwhile, large-scale ones are moving quite slowly through this process,” said the ministry.
“Vietcombank, for example, hasn’t yet chosen any foreign strategic partners although it carried out the IPO nearly one year ago,” said independent analyst Nguyen Tien Dung.
A total of 3,786 enterprises in the country have completed their share sales, according to the Ministry of Finance's data. In the 2008-10 period, the ministry will continue privatizing 948 state-owned firms. (VNA)
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