SOEs fear they miss deadlines for capital withdrawal
VietNamNet Bridge – Nearly all the state owned economic groups and generalcorporations have received orders from the Prime Minister on the procedure anddeadline to implement the capital withdrawal from non-core business fields.However, they fear they cannot fulfill the duty on schedule.
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The Prime Minister has approved the capital withdrawal plan by Vinachem, thechemical economic group. Under the plan, it would have to withdraw all thecapital from 13 enterprises, including the big names like the insurer Bao Minh.
Like many other “big guys,” Vinachem also poured money into a finance and asecurities company, which was “in fashion” some years ago.
An ultimatum has been released to Vinachem that it must complete the capitalwithdrawal process no later than the end of 2015.
However, a senior executive of Vinachem said on Dau tu that it is not easy tofollow the capital withdrawal roadmap set up by the government, since thecurrent stock market performance does not support the capital withdrawal.
“We have to race against the clock to fulfill the duty on schedule. And we haveto ensure that our shares can be sold at the highest possible prices to preservethe state’s capital.
“Though Vinachem’s investment capital in non-core business fields just accountsfor only three percent of the total investment capital, we think we still needto report our case to the Prime Minister for instructions,” he said.
A similar proposal has also been made by General Director of the Southern FoodCorporation (Vinafood 2) Truong Thanh Phong.
“We have our capital withdrawal capital plan approved already. In fact, ourinvestment capital in non-food business fields is modest, just accounting forone percent of the total investment capital. Therefore, we would like to followa reasonable time schedule to ensure the highest possible efficiency,” Phongsaid.
Phong, like the other heads of state owned economic groups and generalcorporations, fear that if they are forced to speed up the capital withdrawalprocess, they would have to sell stakes in hurry at low prices, which would leadto the loss of the state’s capital, for which they would have to takeresponsibility.
It is understandable that the heads of the enterprises don’t want to be urged tosell stakes, because in the context of the current gloomy stock market, it isclear that the shares would not go for good prices.
The one percent of capital Vinafood 2 has to withdraw has been poured into 18enterprises in many business fields, from finance & banking to insurance, fromtourism to sea transport.
Though Phong did not mention the share prices, it’s clearly impossible to sellthe shares at the same prices at which state owned groups bought some years agoto break even. The share prices would depend on the health of enterprises andthe market demand, not on the enterprises’ willing or the book values.
“Will we be able to sell stakes if the buyers only pay the prices much lowerthan the book values?” questioned Nguyen Thanh Phuong, Chair of Vinaconex.
Phuong went on to say that it’s nearly impossible to require the same prices ofthe stakes enterprises bought some years ago, when the stock prices were all skyhigh in a scorching hot market.
“We have suggested that stakes should be sold at the market prices to ensure thehealthy cash flow,” Phuong said.
Regarding the potential buyers, Thoi bao Kinh te Vietnam has reported that theState Capital Investment Corporation (SCIC), a powerful state owned group whichspecializes in making investment with the state’s money, is considering buyingthe stakes to be sold by the SOEs which have been forced to withdraw capital.
By the end of 2012, the stockholder equity of SCIC had reached VND27.7trilliondong. One dollar is equal to VND21,000.