VietNamNet Bridge – The Ministry of Transport’s proposal to equitise the giant Airport Corporation of Vietnam has received the go-ahead from the planning and investment agency.

The Ministry of Transport has green-lighted the equitisation of the Airport Corporation of Vietnam.

The equitisation proposal claims Airport Corporation of Vietnam’s (ACV) chartered capital of VND14.693 trillion ($700 million) and manages 22 airports throughout Vietnam

“The transport ministry proposal to equitise ACV fine-tunes the current orientation for socio-economic development,” Deputy Minister of Planning and Investment Dang Huy Dong stated in Document 566/BKHDT-PTDN opining on ACV’s future development plan.

The planning and investment authorities also recommended the Ministry of Transport (MoT) consider policies to ensure the effective operations of ACV after the sell-off such as having a unified airport development strategy, setting a suitable mechanism on changing management and classifying airport usage based on civil or defence needs.

This is also the Ministry of Finance’s concern about ACV’s equitisation plan as the giant business which promotes aviation transport has received huge financial support for aviation infrastructure projects.

“If ACV turns into a joint stock company, who will manage airport projects in the coming period and how will ACV handle its supervisory and financial obligations as a shareholder?” Deputy Minister of Finance Tran Van Hieu asked.

The Government Office also asked the MoT to ask for the Ministry of Defence’s opinions before reporting to the prime minister for a final decision.

ACV was a late addition to the transport sector’s list of state-owned enterprises set to be equitised by 2015.

“ACV desperately needs tremendous amounts of capital to get its major airport infrastructure projects rolling, including a mammoth project on constructing the new Long Thanh International Airport in the southern province of Dong Nai,” said Minister of Transport Dinh La Thang.

When awaiting the government’s final decision, Thang urged ACV to rapidly establish a steering committee to work on the company’s equitisation details.

“In the coming period, ACV could choose an airport under its management for equitising this year,” Thang suggested.

According to ACV’s latest financial statement, the company raked in VND8.411 trillion ($400 million) in revenue, up 6 per cent on-year and VND1.350 trillion ($64.2 million) in pre-tax profits last year, tantamount to 70 per cent that of 2012. More than half of ACV’s revenue and profits came from Tan Son Nhat and Noi Bai international airports in Ho Chi Minh City and Hanoi respectively.

Despite falling profits in 2013, the Civil Aviation Administration of Vietnam forecast ACV’s revenue and profits could jump this year since the domestic and international aviation market were both predicted to revive after a three year standstill.

As of the end of 2013, ACV had reported VND30.5 trillion ($1.45 billion) in total asset value, VND15.1 trillion ($723 million) in equity and VND14.7 trillion ($700 million) in chartered capital.

Source: VIR