|The divestment plans of SCIC are heavily dependent on the economic situation in 2021 |
A big name on the SCIC list is Saigon Beer-Alcohol-Beverage Corporation (Sabeco). In August 2020, the Ministry of Industry and Trade transferred the state ownership in Sabeco to the SCIC. The value handed over to SCIC was more than VND2.3 trillion ($100 million), accounting for 36 per cent of Sabeco’s charter capital, or more than 230 million shares.
Other state-owned enterprises (SOEs) to be put on sale in 2021 include various big players such as FPT, Binh Minh Plastics, Tien Phong Plastic, Vietnam National Textile and Garment Group, and Bao Viet Group. However, the attractiveness and interest will depend on whether there is market recovery and growth, the pricing, and if potential investors are themselves well placed and persuaded to pursue opportunities.
According to the Corporate Finance Department under the Ministry of Finance (MoF), in the first three months of this year, SCIC divested from nine enterprises including Vietnam Rubber Group, Viettel Group, Vietnam Education Publishing House, Vietnam Posts and Telecommunications Group, and Thai Son Group with a total value of VND234 billion ($10.17 million), collecting VND2.08 trillion ($90.43 million).
At the end of 2020, SCIC achieved a revenue of more than VND7.91 billion ($343.9 million) and after-tax profit of more than VND6.23 trillion ($270.87 million), an on-year increase of 21 and 43.7 per cent, respectively. This year, SCIC aims to achieve a revenue of VND6.49 trillion ($282.17 million) and after-tax profit of VND3.3 trillion ($143.5 million), down 18 and 46 per cent compared to 2020.
Although efforts to push state withdrawals and first-time sales of SOEs have been picking up speed over the past years, the pace of divestments and equitisations remain slow. The unexpected and novel events surrounding COVID-19 took a toll on the health of equity markets and, together with other global market factors, have caused market turbulence. This market volatility makes divestment plans from SOEs highly uncertain.
To resolve this problem, Dang Quyet Tien, director of the Corporate Finance Department said that the MoF will propose the prime minister to release a directive to accelerate the pace of state divestment and equitisation.
He added that the ministry will continue to coordinate with ministries, branches, and localities on restructuring, equitisation, and divestment of SOEs, in addition to supervising and handling the financial problems of SOEs.