VietNamNet Bridge - The equitization of a series of state-owned enterprises (SOEs) will end with a large part of public assets falling into the hands of a group of ‘the super rich’. 

The state has put a lot of valuable assets – profitable SOEs – into sale. However, not all investors can approach the assets. Some of them worry they won’t have the opportunities to buy SOE stakes.

Investors’ hesitancy may cause the plan to equitize 240 SOEs in 2015 to fail, and the SOE sales cannot bring the expected value.

Most of the SOEs sold in recent years are at ‘moderate level’ which do not have many repercussions. Many IPOs (initial public offerings) only witnessed the participation of limited numbers of buyers. And they are all powerful investors.

The most regularly seen investors in the SOE sales are financial institutions. 

Sai Gon Port;s equitization is an example. VietinBank and VPBank became strategic investors with 9.07 percent and 7.44 percent, respectively. 

Two other banks, Vietcombank and Techcombank, also became winners at the IPO of Vietnam Airlines, where they were the only institutional investors. The nation’s flagship air carrier collected VND1 trillion only from the share auction.

In the equitization of Vegetexco, recently, T&T and the Saigon-Hanoi Insurance Company (BSH) of Do Quang Hien, one of the country’s most influential businessmen, successfully acquired 50 percent of the vegetable corporation.

Art Export, which bought 10 percent of Vegetexco’s shares in the deal, turns out to have relations with BSH. 

The shares were sold at VND10,052 per share only, which means that the businesses related to Do Quang Hien only had to spend more than VND400 billion to own a business which has 171,000 square meters of land in HCM City, Hanoi, Nam Dinh and Binh Phuoc.

Analysts said that Hien eyes the corporation because of the large land areas that Vegetexco is managing. The large land fund would allow Hien to develop a series of real estate projects which would bring high revenue in the time to come, when the real estate market warms up.

An analyst commented it is understandable why private financial institutions, who have abundant capital, can be winners at the share auctions. They also have better capability than other investors to appraise SOE assets thanks to credit relations with SOEs.

However, he noted that no one can say how the SOEs will operate if the enterprises fall into the hands of financial institutions, instead of investors with experience in the same business fields.

The presence of a ew investors at SOE sale auctions is also attributed to a lack of information exposure about SOE assets valuation, especially assets related to land use rights.

NCDT