PVN, EVN face ban on non-core investment
PVN, EVN face ban on non-core investment
Vietnam Electricity Group (EVN) and Vietnam Oil and Gas Group (PVN) will be banned from investing in real estate, banking, insurance and stock market, said the Ministry of Finance.
The two State-owned groups have invested heavily in non-core sectors, with PVN having poured over VND5 trillion and EVN some VND1.1 trillion in business areas that are not related to their oil, gas and energy industries.In its draft rules put forth to field suggestions from relevant agencies, the Ministry of Finance says PVN will not be allowed to partner with, invest in or buy shares in real estate, banking, insurance, securities, and other forms of financial investments except certain special cases approved by the Prime Minister.
PVN is also required to restructure and divest every investment made in non-core business operations.
At a conference last October, PVN chairman Phung Dinh Thuc said that PVN had plans to withdraw VND5 trillion from non-core operations by 2015. However, he admitted that with current difficulties, divesting from sectors outside its core operations was tough.
PVN is striving to withdraw capital from subsidiaries and affiliates and will not set up any new offshoots in the coming time, he added.
“PVN will focus on only the main sectors, which are oil-gas exploration and exploitation, petrochemical, electricity, and high-quality oil and gas services. All units under the group are being restructured in line with this orientation,” Thuc said.
According to the restructuring plan approved by the Government in January 2013, PVN will completely divest from Lai Vu Industrial Zone Co. Ltd., Ocean Bank, Green Indochina Development Joint Stock Co., and PetroVietnam Trade Union Finance Joint Stock Company before 2015.
Meanwhile, the draft regulation on the financial management of EVN also mentions that EVN will not be allowed to issue bonds for investing in stock, banking, insurance, investment funds, real estate and finance.
Last December, EVN withdrew VND252 billion from An Binh Bank (ABBank) by transferring VND25.2 million shares to Hanoi General Export Import Joint Stock Company. Currently, EVN still holds over 76.8 million ABBank shares, equivalent to 16.02% of the bank’s charter capital.
Under the restructuring plan approved by the Government in November 2012, PVN will completely divest from ABBank, as well as other non-core sectors by 2015 to focus on the electricity sector.
Beside ABBank, EVN has invested in many companies, including Global Insurance Company, EVN Finance, Saigon Vina and Central Power Real Estate Joint Stock Co.
The non-core investment, at up to VND1.1 trillion, has led to huge losses for the corporation. Consequently, the Prime Minister dismissed EVN chairman Dao Van Hung due to losses at EVN Telecom.
vietnamnet
