Leading telcos striving to reach divestment targets

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In light of Decision 753/QD-TTg, approving the restructuring plan of military-run telecom group Viettel for 2013-2015, the group must complete capital divestitures from five joint stock businesses before the end of this year.

Viettel executives unveiled that by the end of last year, the group had divested VND2.5 trillion ($114 million) of their non-core investments from four businesses, taking back VND3 trillion ($137 million).

The group, the top player in Vietnam’s telecom market, is closely pursuing their non-core divestiture roadmap and committing to reach the divestment target by the year-end as projected.

In October 2013, Viettel stirred the public when it decided to take over debt-ridden Cam Pha Cement from Vinaconex, a major contractor in the construction industry, by purchasing 70 per cent stake.

From a loss-making status, after one year of restructuring under Viettel management, Cam Pha Cement had witnessed 7 per cent revenue growth in 2014 to VND2.5 trillion ($114 million), and reaped VND108 billion ($5 million) in profit.

According to Viettel CEO Nguyen Manh Hung, as Cam Pha Cement is now operating profitably, many foreign partners have met them with proposals for a Cam Pha Cement transfer.

As with state leading telecom group VNPT, the group is obliged to totally divest from 63 businesses in which it has a stake before the end of this year, as per the spirit of Decision 888/QD-TTg, dated June 10, 2014, approving VNPT’s restructuring plan for the 2014-2015 period.

According to VNPT general director Pham Duc Long, they are properly expediting the divestment plan as approved by the government and instructed by the Ministry of Information and Communications (MIC).

“As of now, VNPT took back more than VND701 billion ($32 million) out of over VND2.2 trillion ($101 million) of the sum that needs to be divested, basically matching the projection,” said Long, adding that VNPT is now making procedures together with MIC’s Business Management Department for capital divestment from two major firms, the Maritime Bank, with divestment volume of VND700 billion ($32 million), and the Post and Telecommunication Finance Company, where they hold entire chartered capital of VND500 billion ($23 million).

“We believe on finalising capital divestments from all businesses in the list before the end of this year,” Long said.

In the case of MobiFone Corporation, Vietnam’s second largest telecom firm, at this time the company has completed capital divestment from two media firms, SmartMedia and Neo, and is making procedures for exit from Tien Phong Bank (TPBank) and SeABank.

MobiFone is a founding member, possessing 6 per cent of SeABank’s total chartered capital of VND5.33 trillion ($244 million). The company is also a founding member managing 4.76 per cent of TPBank’s chartered capital of VND5.55 trillion ($254 million).

According to Pham Dinh Trong, head of MIC’s Business Management Department, MobiFone’s enterprise value will be fixed within this year’s fourth quarter, paving the way for the company to hold its initial public offering as earlier projected.