Vinatex to stitch up equitisation move

Nguyen Phuong Mai, director of Vinatex’s equitisation board, said the state-run textile and garment group was waiting for the corporate valuation report.

“The report will be available in January or February 2012. After that, we will set up a detailed equitisation plan to submit to the government for approval,” Mai said.

“We will try to operate as a joint stock company from January 1, 2013. However, that will depend much on the market situation this year,” she added. After equitisation, the state will hold the controlling stake of 60-70 per cent and then gradually decrease its holding to 51 per cent.

Vinatex’s equitisation plan, first put on the table in 2008, has been delayed till now due to unfavourable market conditions. Le Tien Truong, Vinatex’s deputy general director, last year said the group had yet to equitise due to global and Vietnam’s economic difficulties, high inflation and sharply declining purchasing power against increasing prices of input factors such as production materials and electricity.

Mai said the group’s plan to equitise this year followed the prime minister’s Decision 14/2011/QD-TTg which stipulates the ratio of charter capital that state will hold in state-owned enterprises (SOEs). Accordingly, textile and garment firms are excluded from the list that the state must hold controlling stakes in.

The decision was issued  amid slow equitisation progress which saw only 144 equitised SOEs in 2010 and just six SOEs having completed equitisation in 2011. According to a Ministry of Planning and Investment report, 5,856 SOEs had been transformed as of December 20, 2011, including 3,951 enterprises equitised.

Currently, there are four member companies under Vinatex Group which have not been equitised. They are Dong Xuan Knitting Company, March the Eighth Textile Company, Dong Phuong Knitting Company and Vietnam Fashion Company.

In 2011, Vietnam’s garment and textile sector  posted a trade surplus of about $6.5 billion and its localisation rate was estimated to be 48 per cent, up 2 per cent from 2010.

Vinatex is one of 12 state-owned economic groups. In 2011, the textile and garment sector with the revenue of $12.8 billion is one of five sectors which exceeded the revenue of $5 billion.

Therefore, many experts said Vinatex’s equitisation in 2012 was a big event to attract attention of its member companies, its partners and investors.