The conference was held to review the equitisation, restructuring and reform of State-owned enterprises from 2011-2015 and seek measures to promote the process in the next five years.
At the conference, Prime Minister Nguyen Xuan Phuc emphasize the need to make proper roadmap and methods for the equitisasion of SOEs for better business management as well as healthier, more transparent and equal business environment, creating favourable conditions for the growth of private businesses. Effective equitisasion also help reduce corruption, he added.
The Prime Minister also noted that 350 firms equitised in 2015 have operated effectively with their pre-tax profit rising 49 percent, budget payment increasing 72 percent and employees’ income up 33 percent.
With the regard of orientations for 2017, the Prime Minister said that it is crucial to define sectors in which the State needs to keep control and sectors eligible for equitisasion. Heaffirmed that the State should play a core role in public services and a number of areas of State’s responsibility, while withdrawing entirely or partly from the remaining fields.
According to the report of the Steering Committee for Business Renovation and Development, the number of State-owned enterprises (SOEs) has reduced remarkably over the past 15 years, from 6,000 to 718 as of October this year. From 2011 to 2015, 591 SOEs have been equitised, or 96 percent of the target. Most of the equitised establishments thrive. The total State-owned capital in those enterprises rose from 810 trillion VND before equitisation to 1,234 trillion VND.
The committee said the country has equitised 52 State-owned enterprises (SOEs) in the past 11 months. With the equitisation, the State sold shares worth more than 2.814 trillion VND (125 million USD) in book value for more than 5.086 trillion VND. The SOEs are mainly those owned by the Ministry of Industry and Trade, Ministry of Construction, Ministry of Transport, Vietnam Rubber Corporation, and State Capital Investment Corporation (SCIC).
Speed up SOEs’ equitisation
However, the rearrangement and restructuring of SOEs isslower than expectation. To date, several ministries haven’t submitted seven regulations related to equitisation to relevant authorities for approval as planned, the committee reported. In addition, SOEs’ performance has not matched the resources that they hold.
Regarding this matter, Prime Minister Nguyen Xuan Phucpointed to group interest as the largest obstacle hindering the progress of the equitisasion process. He underscored that the most important objective of the reshuffle and equitisasion of State-owned firms is to ensure the highest interest of the State.
SOEs are urged to hire experts for the evaluation of their value, debt settlement and share selling, thus ensuring State interest. In additon, the Prime Minister said it is necessary to invite prestigious international advisors to join the process in order to achieve this goal.
Participants shared the view that it is necessary to speed up equitisation among the parent groups to step up the process at affiliated companies.Divestment of with a full withdrawal from those SOEs active in the sectors where State ownership of over 50% is not needed, and with a reduction to the lowest level possible in the other sectors.
To speed up the next round of equitisation, the National Assembly adopted a resolution that includes reform targets for SOEs in the 2016-20 period. The emphasis is on the SOE reform process becoming “faster and stronger” and the equitisation process becoming transparent, in line with the market mechanism.
According to the resolution, SOEs that go through equitisation must list on the stock exchange one year before they can conduct an initial public offering (IPO) and attract strategic investors. The SOEs’ loss-making investment projects will be set for bankruptcy.
Mr.Nguyen Trong Dung, deputy head of the steering committee, said that by 2020 the Government would fully retain only 190 of 718 SOEs in 12 vital sectors, such as electricity transmission, cartography related to national security and military, railway infrastructure, air traffic services, post, irrigation management, lending for socio-economic development, banking safety and lottery.
While it would speed up equitisation, it would retain at least 65 percent of the companies in airlines services, large-scale mining and banking, excluding insurance, securities, finance and fund management, Mr.Nguyen Trong Dung said, adding that in all other fields, the State would hold on to only 50-65 percent.
