24 rail firms to go private this year
24 rail firms to go private this year
Twenty-four member companies of the Viet Nam Railways (VNR) will make their initial public offerings (IPOs) by December 31, government portal chinhphu.vn reported.
The single entity limited enterprise includes Ha Noi Railway Transport, Sai Gon Railway Transport, Gia Lam Train and Di An Train, alongside 20 other rail infrastructure management businesses.
They are expected to begin operations as joint stock firms on January 1 next year.
The Ministry of Transport has approved the equity plans for the companies, which will sell part of the State's stake and issue more shares to increase their charter capital.
According to VNR reports, the State will maintain a 60 per cent stake in Ha Noi Railway Transport and Sai Gon Railway Transport, while 28 per cent of these firms' equity will be offered to investors, and 12 per cent to employees.
In Gia Lam Train and Di An Train, the State will retain a stake of 75 per cent, while investors will be able to hold between 6 per cent and 16 per cent, and employees will own between 9 per cent and 19 per cent.
For the other 20 companies, the State holding will be 51 per cent, while between 5 per cent and 14 per cent will be reserved for investors, and employee share will be 35 per cent to 44 per cent.
VNR Chairman Tran Ngoc Thanh said the equity plans are being implemented on schedule and suitable for conditions in the rail sector, although the schemes face significant challenges related to the fate of labourers and share sales.
The VNR currently has a staff of 25,500, which will be reduced to around 23,450 after the 24-member companies are privatised.
This means that more than 2,000 workers will be redundant, leaving a policy puzzle for the firms, especially when there are only two months left for them to implement the IPOs and deal with related procedures.
Moreover, no strategic investors have expressed interest in buying shares of these companies, even with firms with greater foreign offerings.
"However, we are determined to take the next steps," Thanh told Giao Thong, the newspaper of the transport ministry.
"We cannot avoid obstacles, but we have to overcome them because this innovation process is unavoidable," he said.
"The employees are willing to buy stakes and contribute capital [to the company] if outside investors are not interested [in the IPO]," Hoang Dang Khoa, the chairman of the Ha Lang Railway Management Co Ltd said.
Vu Anh Minh, director of the finance ministry's corporate management department, said the VNR members are among 28 units in the transport sector that are to go private this year.
The Central Hospital of Transport has completed its IPO, while the Airports Corporation of Viet Nam plans to introduce its IPO in Ha Noi and HCM City on November 19-23, before making the offering on December 12.
