Equitisation of big State corporations delayed
Equitisation of big State corporations delayed
Big State-owned corporations look likely to miss their IPO (initial public offering) schedules set for this year due to prolonged economic difficulties and concerns over business valuations.
Corporations which had been expected to make IPOs this year include Vietnam Airlines and construction materials company Viglacera Corp. Both have now announced they have no plans to sell shares to the public from now until the end of the year.
Vietnam Airlines made plans to value their business prior to equitisation in April, but this work has now been delayed until the end of this year, meaning the long-awaited IPO can only take place in 2014 at the earliest.
Viglacera has stated that it is focusing its efforts on increasing business performance and has not announced when any equitisation may take place, despite earlier projections suggesting it would happen in September.
By the end of June, the corporation's pre-tax profit reached VND6 billion (US$285,700), a major improvement compared to the VND48 billion ($2.3 billion) loss incurred during the same period of last year.
In 2013, 11 corporations under the management of the Ministry of Transport made plans for equitisation. Six months have passed, but none of them have completed this work.
Many companies have stressed the complex nature of the business valuation progress and argued that IPOs cannot go ahead until this process has been fully undertaken.
According to Dau tu chung khoan newspaper, only 10 State companies have completed their equitisation plans in the first half of the year and most of them are small. Many more have delayed their plans until after 2015.
A survey conducted by Coller Capital in December reported that a fifth of private equity investors are turning to emerging Asian markets including Viet Nam and Indonesia as investments in China become riskier. However, overseas investors are struggling to locate promising companies in Viet Nam due to their small scale.
Leaders of private-equity firm TPG Capital said in March that they were interested in purchasing or acquiring stakes in big corporations in Viet Nam, but they were unable to find any companies that met their criteria. The firm was looking for its first investment in the country for nearly four years.
vietnamnews
