Vietnam starts clean-up of state firms

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Vietnam’s coal conglomerate Vinacomin is one of the five largest state-owned companies in the country

Vietnam will soon unveil a plan to revamp 52 state-owned conglomerates by selling stakes or unprofitable assets of most of them in an attempt to get rid of bad debt agglomerated after decades of mismanagement and nepotism that has hurt economic growth.

A roadmap to clean up state-owned enterprises that account for about 37 per cent of gross domestic product will be ready by June, Deputy Finance Minister Truong Chi Trung said in a Bloomberg interview.

The government plans to sell all non-essential units by the end of 2015, and will retain just 50 per cent to 75 per cent in most of its companies. It has already started with a “comprehensive restructuring” of national carrier Vietnam Airlines, see our earlier story.

“The  process of divestment and privatisation will create major opportunities for investors, both domestically and internationally,” Trung said.

And it will also bring more initial public offerings in Vietnam in 2013. The five biggest state-owned companies are Vietnam Oil & Gas Group or PetroVietnam, Vietnam National Petroleum Corp. or Petrolimex, Vietnam Electricity, Vietnam Post and Telecommunications Corp.  and Vietnam National Coal-Mineral Industries, or Vinacomin.

The move marks the biggest effort yet to clean up state-owned monopolies. The companies currently tie up 60 per cent of bank lending and account for more than half of bad debt, crimping credit growth and slowing economic expansion to a 13-year low at 5.03 per cent in 2012.

 

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[caption id="attachment_6924" align="alignleft" width="300"] Vietnam's coal conglomerate Vinacomin is one of the five largest state-owned companies in the country[/caption] Vietnam will soon unveil a plan to revamp 52 state-owned conglomerates by selling stakes or unprofitable assets of most of them in an attempt to get rid of bad debt agglomerated after decades of mismanagement and nepotism that has hurt economic growth. A roadmap to clean up state-owned enterprises that account for about 37 per cent of gross domestic product will be ready by June, Deputy Finance Minister Truong Chi Trung said in a Bloomberg interview. The government plans to sell...

Reading Time: 1 minute

Vietnam’s coal conglomerate Vinacomin is one of the five largest state-owned companies in the country

Vietnam will soon unveil a plan to revamp 52 state-owned conglomerates by selling stakes or unprofitable assets of most of them in an attempt to get rid of bad debt agglomerated after decades of mismanagement and nepotism that has hurt economic growth.

A roadmap to clean up state-owned enterprises that account for about 37 per cent of gross domestic product will be ready by June, Deputy Finance Minister Truong Chi Trung said in a Bloomberg interview.

The government plans to sell all non-essential units by the end of 2015, and will retain just 50 per cent to 75 per cent in most of its companies. It has already started with a “comprehensive restructuring” of national carrier Vietnam Airlines, see our earlier story.

“The  process of divestment and privatisation will create major opportunities for investors, both domestically and internationally,” Trung said.

And it will also bring more initial public offerings in Vietnam in 2013. The five biggest state-owned companies are Vietnam Oil & Gas Group or PetroVietnam, Vietnam National Petroleum Corp. or Petrolimex, Vietnam Electricity, Vietnam Post and Telecommunications Corp.  and Vietnam National Coal-Mineral Industries, or Vinacomin.

The move marks the biggest effort yet to clean up state-owned monopolies. The companies currently tie up 60 per cent of bank lending and account for more than half of bad debt, crimping credit growth and slowing economic expansion to a 13-year low at 5.03 per cent in 2012.

 

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