Part 2: Decree brings necessary conditions

The new decree has lifted the barrier set before for foreign investors. However, in equitized enterprises, the ownership ratios will still depend on the equitization board’s decision. 

While the old legal barrier has been lifted, new technical barriers may be set up. 

An analyst said that Decree No 60 may not be a magic wand for the Vietnam-Oman Investment JSC (VOI), a joint venture between the Vietnam State Capital Investment Corporation (SCIC) and SGRF, the Omani national fund. 

In early 2015, SGRF, through VOI, sent words intimating that it wanted to buy all the shares of the Hai Phong Port the government would sell. 

In fact, Hai Phong Port made IPO in late 2014 already, but the shares were unsalable at that moment. Analysts believed that investors were not interested in the IPO because of the limited amounts of shares they could buy as the government wanted to retain 65-75 percent of the port’s shares.

Regarding the VOI’s proposal on share sale, the government then allowed Vinalines (the Vietnam National Shipping Lines) to sell 19.68-29.68 percent of Hai Phong Port’s shares to VOI.

Later, the Ministry of Transport asked the government to accept to sell the whole lot of shares to a domestic investor – Vingroup, a major player in the real estate sector. The ministry also suggested reducing the state’s ownership ratio sharply to 20 percent.

However, VOI has not given up its plan. It said that if the foreign ownership ratio ceiling of 49 percent was not raised, it would set up a joint venture to develop the Hai Phong Port.

Will Decree No 60 help VOI win the race with Vingroup?

A senior executive of VOI who asked to be anonymous said that with SGRF’s powerful financial capability, the plan to buy as many shares as the government sells will not change. 

However, he noted that Decree No 60 will not have a major impact on share transfer deals of this kind. 

“In equitized enterprises where the State still holds nearly 100 percent shares, it is the regulation on equitization and the decision of state management agencies that will matter,” he said, adding that VOI wishes the government to be transparent in its policies.

An analyst noted that foreign investors have every reason to worry about ‘technical barriers’. A foreign investor reportedly was unable to overcome the barrier when buying shares of the Transport Hospital, though the investor is a major one in the healthcare sector.

TBKTSG