Experts forecast equitising hundreds of State-owned enterprises(SOEs) between now and next year as ordered by the Government will leadto stronger merger and acquisition (M&A) activity in Vietnam, theSaigon Times Daily reported on August 12.
The M&A activity isalso supported by State business groups and corporations required todivest from non-core business areas, including banking, real estate andsecurities investments.
Experts said at Vietnam M&A 2014Forum organised by the Ministry of Planning and Investment in Ho ChiMinh City last week that SOEs will provide the market with a huge amountof capital via their divestments of non-core investments andequitisation, and these are great opportunities for investors.
TheDaily quoted John Ditty, Chairman of KPMG Limited for Vietnam andCambodia, as saying that equitising State corporations, includingMobiFone, Vietnam Airlines and Vinatex will spur the M&A market andopen opportunities for private investors to take part in management andoperation of these enterprises.
Japan has emerged as one of themajor foreign investors in Vietnam. Sam Yoshida, senior managingdirector of Recof, an M&A consulting firm in Japan, was cited by theDaily as saying that more investors from the country in NortheasternAsia are keen on the Vietnamese market thanks to low labour cost, aplentiful supply of labour, political stability and great potential forgrowth.
Statistics showed Japanese firms have invested in a dozenof sectors in Vietnam and participated in at least three M&A dealsin each sector. Yoshida also mentioned the factors for successful dealswith Japanese investors.
“Vietnamese enterprises need to bepatient and provide accurate details when they negotiate with Japanesepartners. Prices are not the top priority of Japanese investors, it islong-term benefits,” the Daily quoted Yoshida as saying.
At ameeting in Hanoi last week, Prime Minister Nguyen Tan Dung toldministries and localities to speed up the equitisation of State-ownedenterprises and continue improving policies and mechanisms to addressthe problems arising from the SOE restructuring process.
It isexpected that the target for 432 SOEs to go public towards the end of2015 is possible as the pace of SOE equitisation in the past sevenmonths of this year was fast, according to the Steering Committee forEnterprise Reform and Development.
In the January-July period,State corporations and groups divested a total of 2.975 trillion VND,three times higher than that of last year, but the divestment processremained slow.
There have been 76 enterprises restructured in theyear to date, with 55 equitised, two dissolved, one sold, 15 merged andthree filing for bankruptcy. As of last month, the Prime Minister hadapproved the restructuring plans of 20 State groups and corporations,including Vietnam National Textile and Garment Group (Vinatex).
Vinatex is scheduled to offer its initial public offering (IPO) on the Hochiminh Stock Exchange (HOSE) in September this year.
Accordingto Vinatex’s equitisation plan approved by the Government, the grouphas total chartered capital of 5 trillion VND. After the group goespublic, the State will retain a 51 percent stake while 24 percent willbe offered to strategic investors, 24.4 percent put up for auction and0.6 percent sold to employees.
Another State corporation, VietnamAirlines, is proceeding with a plan to launch an IPO later this yearand sell shares to strategic investors in the fourth quarter of thisyear before it operates as a shareholder-held concern from January nextyear.
According to Decision 1807/QD-BGTVT signed by Minister ofTransport Dinh La Thang, the value of holding company Vietnam Airlineswas more than 57.1 trillion VND (over 2.7 billion USD) as of March 31last year, with State capital making up more than 10.5 trillion VND.
Thecorporation under the Ministry of Transport plans to increase itschartered capital from more than 14.1 trillion VND this year to 26.32trillion VND in 2018 by selling shares to investors or its shareholdersafter equitisation.
Vietnam Airlines wants to sell 25 percent ofits chartered capital to investors at the IPO. Later, the State holdingat this corporation will gradually decline to 65 percent.-VNA
The M&A activity isalso supported by State business groups and corporations required todivest from non-core business areas, including banking, real estate andsecurities investments.
Experts said at Vietnam M&A 2014Forum organised by the Ministry of Planning and Investment in Ho ChiMinh City last week that SOEs will provide the market with a huge amountof capital via their divestments of non-core investments andequitisation, and these are great opportunities for investors.
TheDaily quoted John Ditty, Chairman of KPMG Limited for Vietnam andCambodia, as saying that equitising State corporations, includingMobiFone, Vietnam Airlines and Vinatex will spur the M&A market andopen opportunities for private investors to take part in management andoperation of these enterprises.
Japan has emerged as one of themajor foreign investors in Vietnam. Sam Yoshida, senior managingdirector of Recof, an M&A consulting firm in Japan, was cited by theDaily as saying that more investors from the country in NortheasternAsia are keen on the Vietnamese market thanks to low labour cost, aplentiful supply of labour, political stability and great potential forgrowth.
Statistics showed Japanese firms have invested in a dozenof sectors in Vietnam and participated in at least three M&A dealsin each sector. Yoshida also mentioned the factors for successful dealswith Japanese investors.
“Vietnamese enterprises need to bepatient and provide accurate details when they negotiate with Japanesepartners. Prices are not the top priority of Japanese investors, it islong-term benefits,” the Daily quoted Yoshida as saying.
At ameeting in Hanoi last week, Prime Minister Nguyen Tan Dung toldministries and localities to speed up the equitisation of State-ownedenterprises and continue improving policies and mechanisms to addressthe problems arising from the SOE restructuring process.
It isexpected that the target for 432 SOEs to go public towards the end of2015 is possible as the pace of SOE equitisation in the past sevenmonths of this year was fast, according to the Steering Committee forEnterprise Reform and Development.
In the January-July period,State corporations and groups divested a total of 2.975 trillion VND,three times higher than that of last year, but the divestment processremained slow.
There have been 76 enterprises restructured in theyear to date, with 55 equitised, two dissolved, one sold, 15 merged andthree filing for bankruptcy. As of last month, the Prime Minister hadapproved the restructuring plans of 20 State groups and corporations,including Vietnam National Textile and Garment Group (Vinatex).
Vinatex is scheduled to offer its initial public offering (IPO) on the Hochiminh Stock Exchange (HOSE) in September this year.
Accordingto Vinatex’s equitisation plan approved by the Government, the grouphas total chartered capital of 5 trillion VND. After the group goespublic, the State will retain a 51 percent stake while 24 percent willbe offered to strategic investors, 24.4 percent put up for auction and0.6 percent sold to employees.
Another State corporation, VietnamAirlines, is proceeding with a plan to launch an IPO later this yearand sell shares to strategic investors in the fourth quarter of thisyear before it operates as a shareholder-held concern from January nextyear.
According to Decision 1807/QD-BGTVT signed by Minister ofTransport Dinh La Thang, the value of holding company Vietnam Airlineswas more than 57.1 trillion VND (over 2.7 billion USD) as of March 31last year, with State capital making up more than 10.5 trillion VND.
Thecorporation under the Ministry of Transport plans to increase itschartered capital from more than 14.1 trillion VND this year to 26.32trillion VND in 2018 by selling shares to investors or its shareholdersafter equitisation.
Vietnam Airlines wants to sell 25 percent ofits chartered capital to investors at the IPO. Later, the State holdingat this corporation will gradually decline to 65 percent.-VNA
