SCIC fails to sell State capital in firms
SCIC fails to sell State capital in firms
Recent attempts by the State Capital Investment Corporation (SCIC) to sell State capital have been unsuccessful as no investors showed interest in buying shares.
The most recent deal was the SCIC’s plan to auction 2 million shares or 73 per cent stake at Vinh Long Real Estate JSC on September 9.
The auction was not held because only one investor signed up for the shares, which was not enough for SCIC to launch the sale.
The SCIC in early August put 46 million shares of tech firm FPT Corp up for sale, hoping to receive at least VND2.27 trillion (US$97.3 million) or VND49,400 ($2.12) per share.
FPT shares (HoSE: FPT) in early August moved between VND46,000 and VND47,000 apiece, quite close to the price asked by the SCIC.
Since the company has run out of room for more foreign capital, the deal was suitable for Vietnamese investors only.
The SCIC failed to offload FPT shares and analysts attributed the failure to the high asking price, which was considered too much for domestic investors.
The same month, the SCIC offered 17.8 million shares at An Giang Food Import-Export JSC for VND18,900 apiece, making for a total value of VND337.4 billion.
Similar to FPT, the auction of An Giang Food Import-Export JSC shares was not completed because no investors registered.
The company's shares almost doubled to VND11,900 per share on August 17 from VND6,000 per share on August 7. They then slid towards VND8,500 per share on Thursday.
Other large-cap companies whose shares are on the must-sell list of the SCIC this year include Bao Minh Insurance Corporation, pharmaceutical firm Traphaco, Viet Nam Steel Corporation and Viet Nam National Textile and Garment Group.
According to analysts, the key reason for the failure to offload State capital in local firms is the COVID-19 pandemic, which has had a highly negative impact on the economy and restricted potential investors from buying those companies’ shares.
In addition, shares were sold in a package, meaning the buyer must pay for all the shares offered without other options. Some companies were large so their shares were highly valued, making it difficult for investors to buy all the shares offered by the SCIC.
Nguyen Duc Chi, chairman of the SCIC’s board of members, said that the mechanism set by the Government is sometimes the main reason for the deal failure.
Though the rules are made to ensure State assets will not be lost, they do not match market demand, he said.
