On Wednesday morning, Deputy PM Hue hosted a working session with the MPI, along with the Ministries of Finance and Justice and the Steering Committee for Business Renovation and Development, to collect comments on the construction of the list.
MPI Deputy Minister Dang Huy Dong said that the PM’s Decision No. 58/QĐ-TTg on criteria for classifying SOEs and Decision No. 707/QĐ-TTg on restructuring SOEs with a focus on State economic corporations during 2016-2020, all assigned the MPI to build a list of enterprises with State capital that need to be sold in the 2017-2020 period.
In the past few years, the sale of State capital was implemented by the relevant ministries and localities in accordance with current regulations. To date, the preparation by the PM for a comprehensive list of SOEs that will make divestment during 2017-2020 is a necessity in order to secure the proceeds from divestment to be distributed to medium-term investment projects, acting as a tool to monitor and facilitate the selling of State capital carried out by the concerned ministries and localities, thus accelerating the pace of divestment.
Since the beginning of the year, the MPI has reviewed and consulted numerous ministries and localities to make a list and determine the annual capital withdrawal ratio based on the SOEs criteria in the PM’s Decision No. 58 and the annual capital divestment route under the PM’s Directive No. 24 on solutions to boost the growth among sectors in 2017, in addition to Resolution No. 26/2016/QH14 of the 14th National Assembly on the medium-term public investment plan 2016-2020.
Deputy Minister Dong added that in 2017 divestment is set at VND60 trillion (US$2.64 billion) to secure equitisation proceeds. It is expected that in the second half of the year, enterprises will withdraw over VND19.8 trillion (US$871.2 million) (according to preliminary calculations, the value of listed shares can produce almost VND30 trillion).
In addition, the PM’s draft decision requires the sale of State capital at these SOEs to be transparent, in accordance with regulations and under the market mechanism. For large capitals, capital must be sold in a number of installments, but the amount in each installment must be between 20% and 36% of the total of capital required for divestment in order to make it attractive to investors.
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Deputy PM Vuong Dinh Hue speaks during the working session. (Credit: VGP)
Commenting on the draft decision on this list proposed to the PM, Deputy PM Hue said that with large SOEs such as Habeco, Sabeco, SCIC, PVN, EVN and ACV, the government leader will issue a separate decision on their equitisation and the sale of State capital. The remaining SOEs need to be fully aggregated in a list of those with State capital to be sold to the public for investors to make investment decisions.
The deputy PM also agreed with the draft document when setting the rate of sale of capital for each year (the minimum rate) but to not "freeze" this rate, while encouraging the ministries and localities to increase the rate and accelerate the sale of State capital, according to the current market situation.
In addition, he also assigned the Ministry of Finance to review and calculate the number of SOEs and their amount of capital to be divested by 2020 and report it to the PM in 2017.
According to the MPI, the total number of SOEs (excluding enterprises belonging to the Ministry of National Defence, Ministry of Public Security, Ho Chi Minh City People's Committee, the State Capital Investment Corporation (SCIC), and SOEs selling capital under the PM’s separate decisions) is 375, with total capital of VND108.5 trillion (US$4.8 billion). The total capital expected to be divested during 2017-2020, according to the listed values, stands at VND64.5 trillion (US$2.8 billion).
MPI also drafts a list of specific businesses that will need to sell State capital each year; in 2017 161 companies will be selling State capital, along with 185 in 2018, 65 SOEs in 2019 and 25 in 2020.
