Big players wrestle with equitization

The equitization of state-owned economic groups, the big players in the national economy, has been highly anticipated. Most have not made any discernable move forward in the process, however, even though they have been at the starting line for a long time.

Among the big players, only the Vietnam Paper Corporation (Vinapaco) knows when it will make its initial public offering (IPO).

Vinapco Chairman Do Xuan Tru said that the corporation is nearly finished with the enterprise valuation to complete the equitization process in December 2009. After that, Vinapaco will make its IPO through the Hanoi Stock Exchange in the first quarter of 2010, followed by listing on the official bourse.

When asked about the starting price for its IPO, Tru replied that the corporation previously set the price at 11,000 dong per share. However, he noted that the price is “out of date,” because it was set in 2008 when the national economy and stock market faced many difficulties. Vinapaco is planning to raise the price, but only when the stock market has warmed and the corporation’s business has gone well.

Meanwhile, Chairman of the Vietnam Textile and Garment Group (Vinatex) Le Quoc An has confirmed that its IPO may not take place in 2010 as previously planned. Vinatex expects to finish valuating enterprises by mid-2010 and wrap up the equitization process by the end of 2010. The IPO plan will only be considered after that time.

It remains unclear what percentage the State will hold in an equitized Vinatex, because the final plan has not yet been approved, according to An.

MobiFone, the telecommunications giant, has delayed its equitization plan twice. There has been no sign that the telecom service provider will resume or conduct the equitization process, let alone the IPO plan.

The State has decided that 700 state-owned enterprises must be equitized by 2010, including many economic groups and general corporations. Thought the deadline is nearing, it may seem that some enterprises are in no hurry.

Actually, the enterprises want to push up the equitization process, but they find it difficult to fulfill necessary requirements.

Tru of Vinapaco said that it has faced problems in locating strategic shareholders due to unreasonable regulations.

“To date, Vinapaco has not found strategic shareholders yet,” Tru confirmed, adding that Vinapaco has considering Chinese Jiu Long Paper Corporation as the strategic shareholder, but it has not made final decision.

Seeking strategic shareholders has also been a headache for Vinatex. An admitted that it still has not found strategic partners because of the same legal problems.

Opinions still vary about how quickly equitization should occur. Some say that quality, not the number of enterprises equitized, should be the priority. Others claim that too much perfectionism will not bring about anything good.

VietNamNet/DTCK

Tags: Vietnam enterprises