Fast equitisation of MobiFone called for

Singapore Technologies (ST) Telemedia, a subsidiary of Temasek Holdings, is urging the Vietnamese Government to accelerate the long-delayed equitisation of MobiFone, one of the three domestic leading mobile service providers.

Leaders of ST Telemedia paid a number of visits to Viet Nam over a year ago, focused on MobiFone’s equitisation plan, and the Singapore company recently expressed its increasing concerns over the domestic firm’s repeatedly delayed action, Dau Tu (Vietnam Investment Review) reported.

MobiFone has planned to equitise since 2005 but, after six years, the move remains on the back burner.

VNPT Group, the State operator of both Vinaphone and MobiFone, has now proposed to the Government three plans for divesting capital from either company, including a plan for equitising MobiFone, and is awaiting a decision.

The working groups of the Viet Nam Business Forum recently expressed their concerns over the slow process of equitisation of State-owned enterprises in Viet Nam since 2008. According to the Ministry of Finance, only 144 enterprises were equitised last year.

Initial public offerings (IPOs) of State-owned enterprises have underperformed due to the persistent downtrend on the stock market, and many have been delayed.

“The Government should accelerate this programme with a new roadmap, giving clear criteria and specific timetables,” said Dominic Scriven, leader of the Capital Market Working Group of the Viet Nam Business Forum.

Despite the long downtrend on the stock market, the market still needed “high quality merchandise” to attract both domestic and foreign investors, Scriven said.

He also urged the State not to overvalue its IPOs. “Issuers tend to sell high, or Government agencies are often afraid of selling State assets at cheap prices,” he said, suggesting valuation should be made by an independent organisations with rich market expertise.

However, Pham Manh Thuong, deputy general of the Debt and Asset Trading Co under the Ministry of Finance, said, although a schedule was in place to govern the equitisation process, that did not necessarily mean equitising at any cost.

“Equitisation is just a means but not a goal, and it also is not a miracle cure for reforming State-owned enterprises,” Thuong said. — VNS

Tags: Mobifone, Mobifone equitisation