EVN tightens investment rules
EVN tightens investment rules
Electricity of Viet Nam (EVN) will not partner with, invest in or buy shares in the real estate sector, banks, and other financial sectors, except under the prime minister's authorisation.
As part of this policy, EVN, a State-owned electricity provider, will not consider investment in securities companies, hedge funds and securities investment companies, according to a financial regulation draft issued by the Ministry of Finance.
The ministry has issued the draft to collect suggestions for regulations before they are formally recognised, the Ministry of Finance stated.
Under the regulations, EVN will use its capital to invest in non-core businesses underlined within the company's organisation and operation regulations. The investments in non-core businesses must ensure efficiency, conservation and development of the invested capital, must increase revenue and must remain unchanged operationally.
EVN must get the prime minister's approval to add businesses to its operation regulations or to invest its capital into non-core businesses that are at variance with its operation regulations for the next few years.
Meanwhile, EVN will not receive investments or joining capital from its subsidiaries, and the subsidiaries with EVN's wholly invested capital will not be used to buy shares at other subsidiaries of EVN when being equitised.
The draft also has clear regulations on the mobilisation and use of capital, selling of debts, salaries for labourers and the retail prices of electricity.
EVN plans to withdraw capital worth VND2.07 trillion (US$97.64 million) from seven non-core companies by 2015.
The withdrawal, as part of its master restructuring plan, will ensure that EVN focuses on its core business of power production and trading to better serve society and the economy.
In 2013, EVN had withdrawn some VND252 billion ($12 million) from An Binh Bank and VND26 billion ($1.22 million) from GIC.
Last October, the Government Inspectorate announced that by the end of 2011, EVN's non-core investments reached VND121 trillion ($5.76 billion) and surpassed its charter capital of almost VND77 trillion ($3.7 billion). Despite the large non-core investments, EVN reported losses of VND2.2 trillion ($104.7 million).
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