Equitisation enters new stage (23/10)
06/08/2010 - 214 Lượt xem
More open and fair for
investors
The most notable point is a series of policy
changes that will be carried out further facilitate foreign investors to buy
stock in Vietnamese companies.
Those changes are suggested by the Ministry of
Finance (MoF) and they are backed by related ministries, sectors and businesses
in a bid to raise more foreign portfolio investment and to boost the
equitisation process.
The biggest change is that from now on, foreign
investors in joint ventures or wholly foreign owned companies registering to
operate in
They will be permitted to buy stocks at almost
equitised enterprises, except for those running in the 14 fields of
conditioned investment applied to foreign investors in accordance with the
Decree 108/2006/ND-CP guiding the implementation of the new Investment Law.
The second new point is the percentage of stocks
that are auctioned publicly will be raised to 30% instead of 20% at present, of
which a certain part will be sold to strategic investors.
The third point is the abolishment of price
reduction policy of 20% for domestic strategic investors in order to create an
equal business environment among investors.
The selling price for strategic investors is the
winning price in auctions or a negotiable price, which must not be lower than
the average auction price of normal investors.
According to an MoF representative, those new
points will be added to a new decision to replace the Decision 36/2003/QD-TTg
on capital contribution, and stock purchase by foreign investors in Vietnamese
companies.
The new decision, which is being drafted, will
also be updated with new content in the Enterprise Law, the Investment Law and
other new legal documents, for example the re-purchase of business, considering
overseas Vietnamese who still keep Vietnamese nationality as local investors,
etc.
Encouraging equitisation
by ending preferences
In parallel with the Decision 36, another
document that directly influences the process of equitisation, Decree
187/2004/ND-CP on arranging, and renovating SOEs is also being amended.
Accordingly, tariff preferences used to encourage SOEs to equitize will be no
longer applied.
According to a document the MoF sent to the
government, SOEs that performed equitisation in the previous period were mainly
small and medium ones, which faced financial difficulties.
To encourage those enterprise to conduct
equitisation, the government allowed equitised enterprises to enjoy preferences
that are similar to those granted to newly established enterprises, not having
to fulfill formalities on investment preference certificates. In which, the
most important thing is that those enterprises are exempted from corporate
income tax for two years and enjoy a 50% reduction in the two following years.
In case they list their shares on the stock market, they will be given other
advantages under the laws on securities and stock markets.
However, in the coming time, SOEs that must be
equitised are mainly large in scale and have set their foothold very firmly in
the market. If the above preference policy is still applied, it will be unfair
for newly established companies and affect budget revenue.
If this policy is applied to some big firms like
the Bank for Foreign Trade of Vietnam (Vietcombank), the Mekong Housing
Development Bank, the Vietnam Construction Import Export Corporation (Vinaconex),
the Vietnam Insurance Corporation (Bao Viet), the Saigon Beer Corporation,
MobiFone and Vinaphone, the state budget will lose thousands of billions of
dong.
On the other hand, the new Investment Law
doesn’t mention corporate income tax preference for listed firms so the
abolishment of the above preferences will surely be verified.
New subjects
Though the government is still timid in opening
some fields for foreign investors, it has made many brave changes in defining
the subjects for equitisation.
Pham Viet Muon, Vice Chairman of the Government
Office and Vice Chairman of the Steering Board for SOE Reforms, said that the
government has agreed to equitize most of the state commercial banks instead of
equitising only the Vietcombank and the Mekong Housing Development Bank as in
the previous plan.
Specifically, apart from the two above banks,
the Industrial and Commercial Bank of
However, the equitisation itinerary for those
banks will be carried out in two phases. Firstly, those banks must improve
their financial capability to reach financial healthy standards up to
international standards. Equitisation will come after that.
The roadmap for Incombank and BIDV is completing
the improvement of their financial capability by the end of 2006 and equitising
in 2007. Meanwhile, it will be improving in 2007 and equitising in 2008 for
Agribank, respectively.
Besides banks, some companies operating in the
fields of security and defence, which are considered ‘special subjects’ will
also be equitised.
Of the 2,176 wholly State-owned enterprises,
which have a total capital of VND260,000 billion, the government will keep only
554 as wholly state owned, including 26 groups and corporations and 178
companies operating in the areas of security, defence, and producing essential
products and services.
With such new changes, the Vietnamese
government has proved its determination in comprehensively reforming SOEs.
However, what is more important is how will those things be realized in fact.
Equitisation roadmaps for some big SOEs
- Vietnam
Oil and Gas Corporation (PetroVietnam): Completing equitisation of subsidiaries
that the state doesn’t need to wholly own, including: the Oil and Gas Technical
Service Company, Oil and Gas Transportation Company, Northern Liquefied Gas
Trading Company, Southern Liquefied Gas Trading Company, Oil and Gas Insurance
Company, Oil and Gas Fertiliser and Chemical Company; Converting the Gas
Product Trading and Processing Company, Lubricant Trading and Processing
Company and Oil and Gas Financial Company into one-member limited
responsibility companies; converting the Oil and Gas Exploration and
Exploitation Company into a parent-subsidiary model; establishing the Oil and
Gas Securities Trading Company and the Oil and Gas Labour Import Export
Company.
- Vietnam
Coal and Mineral Group: Equitising and listing stocks of 19 subsidiaries
working in the fields of mining, thermo-power production and mechanical
engineering; establishing the Coal and Mineral Financial Company and other
companies that will work as investors in thermo-power, bauxite mining,
aluminum, iron production, etc.
- Vietnam
Textile and Garment Group: Equitising 12 member companies and 12 departments of
other members and equitising the parent company, the Vietnam Textile and
Garment Group in 2008.
- Vietnam Insurance Corporation (Bao Viet): Completing equitisation in 2006 to operate in the model of parent-subsidiaries; Establishing the Bao Viet Bank, Bao Viet Community Health Insurance Company, Bao Viet Real Estate Company, Bao Viet Financial Leasing Company and the BaoViet International Company to invest abroad.
Source: TBKTSG
