No place for beneficiary groups at upcoming Vietnamese leading brewers

The public auctions of both Habeco and Sabeco will take place after these firms make their debuts on the stock market, a step which must soon be implemented by the breweries under the prime minister’s recent instructions.

With respect to the auction starting price, the Ministry of Industry and Trade (MoIT) – the management authority in charge of Habeco and Sabeco – proposed hiring experienced independent consulting units, which would include foreign consultants, to work on evaluating the breweries’ share value.

If the breweries are listed on the stock market, the price that shares trade at will serve as a reference in setting start prices at auction.

What has merited new attention is that the bidding is now open to all investors, irrespective of their business fields.

In the past, one of the conditions in selecting a strategic partner for Sabeco was a prohibition on foreign brewer interest. It was thought that this would help avoid direct competition with the local partner’s business fields.

“Stock listing, public auction, and no restrictions in investor criteria will help ensure the deal transparency – while bringing maximum benefits to the state budget,” said a source from a foreign brewer who was once interested in acquiring a Sabeco stake.

“The Vietnamese prime minister’s recent decision on the continued sale of state capital at Sabeco and Habeco was reported to our parent company in its host country. We cannot make further comment at this time because the decision is fresh and no official plan on the deal is currently available,” the source added.

MoIT was reported to be waiting for the government’s final decision on their restructuring plans before taking the next steps.

According to Deputy Minister of Industry and Trade Do Thang Hai, due to different capital sizes of the breweries, their divestment plans will also be different.

For Hanoi-based Habeco, MoIT has proposed selling the entire remaining state-owned stake of 81.79 per cent within the year.

In the case of Ho Chi Minh City-based Sabeco, due to its sizable capital volume the capital divestment plan will comprise two rounds. About 53.59 per cent of the company’s chartered capital is proposed for sale in the first round, slated to take place within the year. The remaining 36 per cent will be sold in the second round, proposed for 2017.

With respect to Habeco and Sabeco’s future public auctions, the prime minister also said the land use rights of the breweries should be separately calculated when selling their stock.

Nguyen Duy Hung, chairman of Saigon Securities Inc., a leading financial institution in Vietnam, said that the market has long waited for the official decision on Sabeco and Habeco. The insider take is that the capital divestment plan would be good for all market players, with the exception of certain beneficiary groups.

“This decision helps prevent hand-shake [agreements] between certain beneficiary groups, which may cause losses to state assets and capital through imposing restrictions to investor selection criteria based on the subjective mindset of some people directly implementing the deal,” Hung said.

“The decision also helps maximise the deal proceeds. Besides, the transparent operation of listed firms will help the breweries boost business efficiency and increase contribution to state coffers through tax payments.”

The initial public offerings for both Habeco and Sabeco took place in early 2008. At present, 15.77 per cent of Habeco’s chartered capital is held by Danish brewery Carlsberg.

At Sabeco, of a total 10.41 per cent in chartered capital currently retained by foreign investors, 5 per cent belongs to Dutch brewing giant Heineken.