VietNamNet Bridge - Businesses with a large number of shares can be easily sold, but companies with smaller amount of shares cannot find buyers.

 

One year ago, when the State announced that it would put 432 state-owned enterprises (SOEs) into equitization in 2014-2015, analysts warned that the plan could fail because investors would not have enough money to buy all the 432 businesses within two years.

However, they were wrong. The problem was not the investors’ financial capability, but the way the State sells businesses.

Nguyen Anh Trung, director of the Hai Phong Securities Company’s Hanoi branch, said many investors showed interest in buying Hai Phong Port’s shares. However, after realizing that the State intended to sell 5 percent of the chartered capital only, they gave up.

“The investors want to acquire the proportion of shares large enough to allow them to join the board of directors,” Trung said.

“SOEs will still be unattractive to investors if the State still holds more than 50 percent of stakes in the enterprises,” he said.

Hoang Nguyen Ngoc, deputy general director of the State Capital Investment Corporation (SCIC), said the super-corporation specializing in making investments with the state’s money also noted that it would be better to sell business shares in big lots.

He said investors interested in businesses prefer large share lots, and they are willing to pay high prices for the shares.

“It would be easier to sell businesses in large share lots or as a whole, as it can go for better prices,” he noted. 

An analyst said the State has been aware of this situation since mid-2014. However, legal documents on the issue have not been released. 

This is why many SOEs remain unsold. These include construction companies, which had planned to issue additional shares while maintaining the state’s controlling stake ratio.

Minister of Transport Dinh La Thang has defended the solution to sell businesses in large share lots.

He has proposed to apply the solution to the sale of Vinamotor, Cienco 5, Cienco 6, Hai Phong and Quang Ninh Ports.

Equitization goes slowly

A report from SCIC shows that equitization of SOEs has had modest success. In 2011-2014, the success ratio of SOEs’ share auctions was 51-66 percent. The figure was only 40 percent in the first quarter of 2015.

Ngoc said that SCIC had fulfilled 70 percent of the plan to sell state capital. It has been especially difficult to sell unprofitable businesses.

SCIC this year has sold 22 businesses. It would need to sell one business a day from now to the end of the year to fulfill its plan.

Pham Huyen