SCIC to retain key stakes in some prominent firms

Despite advice from international experts, the SCIC will retain its stake in some non-essential investmentsPhoto: Le Toan

Accordingly, the State Capital Investment Corporation (SCIC) will continue to maintain long-term investment in Vinamilk, FPT Telecom, Hau Giang Pharmaceuticals, and Vietnam National Reinsurance Corporation (Vinare).

SCIC represents the interests of state-owned capital in enterprises.

The plan conflicts with advice by foreign investors that the state should sell stakes in non-essential sectors including dairy production, to offset the budget deficit.

Many experts also said that selling state-owned shares in such companies would help improve corporate governance and bolster the development of these sectors.

SCIC currently holds 375.7 million shares in Vinamilk, equivalent to 45 per cent of the company’s charter capital. Thanks to this holding SCIC will receive up to VND1.73 trillion ($82.4 million) in dividends from Vinamilk this year.

FPT Telecom will provide dividends of 40-50 per cent per year, Vinare 20 per cent and Hau Giang 25 per cent. SCIC’s ownership ratios in these three firms stand at 50.2 per cent, 40.36 per cent and 43.31 per cent, respectively. It is expected that these three companies would bring about more than VND2.07 trillion ($98.57 million) from their dividends to SCIC in 2013.

Under the restructuring plan, SCIC will retain a 100 per sent stake in SCIC Investment, An Giang Quarry and Processing Company, and Vinaconex Investment and Mineral Trading Company.

SCIC will also retain a controlling stake in Dien Bien Services, Tourism and Trading Company, and Lai Chau Mineral Company following equitisation.

Meanwhile, SCIC will reduce its ownership ratios at 376 companies including major players such as Vinaconex, Bao Viet Holdings, FPT, Traphaco, Binh Minh Plastics and Tien Phong Plastics.

By 2015, SCIC’s charter capital will be raised to VND50 trillion ($2.38 billion) from the current VND5 trillion ($238 million).