State's Shares in Electricity Industry to Be Sold

Recently, Vietnam’sAssociation of Financial Investors (VAFI) has asked the Ministry of Finance, Ministry of Industry and Electricity of Vietnam (EVN) to sell part of its state owned shares in equitized enterprises of EVN. The proportion of state owned shares amounts to 60 per cent of the registered capital of Vinh Son – Song Hinh Hydroelectric Plant and 75 per cent of Pha Lai Thermoelectric Plant and Thac Ba Hydroelectric Plant. According to VAFI, with such a high rate of shares, EVN has the right to decide all activities of enterprises after equitisation. Share prices sold outside are not high because buyers have to take administrative risks into account. The reduction to 51 per cent of shares of EVN in electric plants in Thac Ba, Vinh Son – Song Hinh and Pha Lai will bring about a value of VND15, 000 billion (USD943 million) and a higher price for those shares.

 

Reportedly, the Ministry of Industry has agreed to continue selling state owned shares in above the enterprises due to the detailed selling projects noted by enterprises.

 

According to Mr. Dinh Quang Tri - Vice Director of EVN, EVN will develop concrete plan to sell state owned shares in the coming time. EVN’s aim is that the state will take 51 per cent of shares in equitised electricity plants. However, the sale will be gradually implemented, not all at once. After the first equitisation process, share prices of the above enterprises will increase greatly, therefore the next price will not be as cheap as the initial one.

 

Currently, EVN is preparing to consecutively equitize 5 electricity plants and 13 provincial electricity divisions. The valuation of these plants has been basically finished. Thus, Thac Mo Hydroelectric Plant values VND1, 300 billion (USD81.8 million), Uong Bi 1 Thermoelectric Plant and enlarged Uong Bi Thermoelectric Plant value VND1, 300 billion (USD81.8 million); Ba Ria Thermoelectric Plant values VND2, 200 billion (USD138.4 million) and Ninh Binh Thermoelectric Plant values over VND200 billion (USD12.6 million).

 

Mr. Dang Phan Tuong – Head of the Equitisation and Stock Committee of EVN said, the selling of Thac Mo’s shares might start in early May. However, the state will keep the major proportion in those enterprises in the fist selling to market. This proportion is estimated to be not less than 60 per cent.