Prime Minister Nguyen Tan Dung recently chaired the conference on restructuring state-owned enterprises (SOEs) in 2014-2015 in Hanoi, with the participation of ministries, localities and businesses.
Mr Pham Viet Muon, Deputy Head of the Steering Committee for Innovation and Business Development, said, from 2011 to 2013, Vietnam equitised 99 enterprises including 12 enterprises in 2011, 13 in 2012, 74 in 2013. Among those, there were 19 state-owned corporations.
Vietnam collected VND19 trillion by selling shares of these 99 enterprises. Most companies achieved considerable growth rates and higher operational efficiency after equitisation. The advent of the joint stock companies has helped increase competitiveness, promote restructuring of the stock market, and spur innovation in production relations and roles of SOEs in the socialist-oriented market economy.
At the conference, reports indicated that 28 loss-making enterprises had been restructured in three years. Before the restructuring, most of these enterprises were on the verge of bankruptcy. Many SOEs are being restructured by having their outstanding debt and assets purchased. Eleven other enterprises will be restructured in the same way.
According to Mr Pham Viet Muon, equitisation, which is the most critical and complex mission in restructuring, should be of particular interest, as well as proposed outstanding solutions to gain higher efficiency. To achieve its objectives, from now until 2015 Vietnam will strictly restructure SOEs, even profitable SOEs, focusing on equitising SOEs and economic groups, divesting non-core ventures and selling unnecessary state shares according to market principles.
According to the plan of the Steering Committee, Vietnam targets to equitise 432 companies in 2014 and 2015.
The Steering Committee also plans to boost divestment of non-core ventures of groups, public corporations, reaching about VND22 billion. Therefore, proper regulations should be promulgated to solve problems in divestment and create a tight feasible schedule in order to reduce ineffective investment, even having to sell at under par value. Categorising SOEs according to sectors, industries, management agencies will be initially applied for the industry, trade, transport and construction. Companies which are qualified to issue IPO shall comply with current regulations. Those not yet qualified, will be transformed into joint stock companies with shareholders being the State or SCIC. Based on the specific conditions of each enterprise, the State may hold prominent stake. The target of this measure is to change the legal form of businesses, diversify ownership, contribute to the democratisation of business, and create market-ready corridors meeting investor requirements.
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