HCM City seeks new deadline to convert SOEs

With the July 1 deadline passed for converting State-owned enterprises under its control into limited liability or joint stock companies, the HCM City People’s Committee is telling the Government it can meet the requirement by September 30.

The People’s Committee has ordered 44 enterprises to hasten the process of finalising the conversion by the end of the third quarter.

Thirty-five of these enterprises will be converted into single-member limited liability companies and two others merged into other limited liability companies owned by the city.

The City plans to sell four companies which ceased operations last year due to operating losses totalling VND117.4 billion (US$6.17 million), including three member companies of Sai Gon Construction Corporation and Viet Phu Food Processing Co, a subsidiary of Sai Gon Agriculture Corp. The companies have completed audits and inventories preliminary to their final sale.

To hasten the transformation, the HCM City People’s Committee focuses to direct and solve the difficulties related to the charter capital, fund for enterprises rearrangement and equitisation, and the process of transforming SOEs to one-member limited liability companies.

The city has so far reorganised nearly 400 State-owned enterprises. Among these, 202 enterprises have been privatised and 86 transformed into single-member limited liability companies. Seventeen have been converted into parent companies. Fifty-seven enterprises have been merged with other companies and 17 enterprises dissolved.

Government Decree No 25/2010/ND/CP provides the legal basis for the conversion of the State-owned enterprises into single-member liability limited companies.

Equitisation was intended to create a level playing field for all business without discrimination, as well as to halt the losses of many State-owned companies, said VFAM Viet Nam Consulting Co lawer Vu Xuan Tien.

“The purpose of equitisation is to raise capital, improve business methods and renew technology to make enterprises more competitive,” Tien added. — VNS

Tags: Vietnam companies, Vietnam enterprises, Vietnam SOEs