VNR to sell all stakes in 19 subsidiaries
VNR to sell all stakes in 19 subsidiaries
The Viet Nam Railways Corporation (VNR) plans to complete divestment in 19 other subsidiaries during the first quarter of this year, Doan Duy Hoach, VNR's deputy general director said at the company's meeting on Tuesday.
VNR reported that it had divested its entire share in seven companies and was still making divestments in four others of the total 27 non-core companies when 2015 drew to a close. After the divestment, VNR gained VND192 billion (US$8.5 million), 2.4 times higher than the investment.
By the end of 2015, VNR successfully equitised 24 of its enterprises, fitting with the plans given by the Ministry of Transport.
Minister of Transport Dinh La Thang, who also attended the meeting recognised the efforts of the railway sector as well as their transformation of SOEs into joint stock companies. However, he required a faster transfer from SOEs to JSC in the future for better business results, saying that if the railways only relies on state funds, it could not modernise the railway system.
Thang said the profit VNR earned was not equal to the potential of the sector in Viet Nam. More importantly, the railway fares were higher than the roadway and budget airlines.
VNR earned total revenue of VND11.662 trillion ($51.81 million), resulting a profit of VND65 billion ($2.88 million) last year.
Tran Ngoc Thanh, VNR's chairman of the board, also identified that the railway industry will face challenges this year from the road transport sector and budget airlines, even though the VNR's transport companies were new in their operations as joint stock companies.
However, he said, VNR was determined to implement all necessary measures to enhance corporate governance, stability and development of enterprises after equitisation, while ensuring the efficiency of rail transport.
Last month, two of the VNR's companies had their intial public offering (IPO) auctions, which are Ha Noi Railway Transport Company Limited and Sai Gon Railways Company Limited. VNR earned nearly VND74.7 billion ($3.3 million) from these two IPO auctions.
These two auctions were among 17 IPO auctions that were organised in December on the Ha Noi and HCM Stock Exchange, which brought nearly VND1.9 trillion ($84.4 million) for the State.
