New policies to promote State capital divestment at SOEs

New policies to promote State capital divestment at SOEs

The finance ministry proposes flexible pricing and block sales to accelerate State divestment, unlock stalled capital and revive nearly 40 hard-to-sell State-owned enterprises.

The State divestment at the SCIC showed that the sale of many SOEs, which operate inefficiently, are unattractive to investors and failed to sell for many times. Photo cafef.vn

The Ministry of Finance has proposed new policies to speed up the divestment of nearly 40 State-owned enterprises of the State Capital Investment Corporation.

In a draft decree on operational and financial management mechanisms for State-owned enterprises released recently, the ministry proposes allowing adjustments to the starting price for unlisted SOEs or those that are listed but trade off-exchange if an auction or State capital sale agreement is unsuccessful. The starting price can be reduced by a maximum of 10 per cent for each subsequent auction. The maximum number of auctions allowed is three, with a gap of no more than two months between adjustments.

In cases where a business is operating at a loss or fails to sell after three auctions, the SCIC is allowed to further reduce the starting price to hold another auction. However, this price must not be lower than the book value after provisions or the average reference price of the 30 days prior to approval of the transfer plan for listed enterprises.

According to the ministry, the SCIC currently has nearly 40 enterprises that are difficult to sell, with a total value of approximately VNĐ433 billion (US$16.5 million). Although the value is not large in scale, the inability to resolve these cases causes capital stagnation, preventing reinvestment in State priority areas. These enterprises have been repeatedly offered for sale at the price stated in the valuation certificate but have all failed. Therefore, a more flexible mechanism is needed to improve feasibility.

The ministry also noted that State divestment at the SCIC shows many inefficiently operating SOEs remain unattractive to investors and have failed to sell repeatedly. If the SCIC continues to sell each type of share separately as it does currently, it will face significant difficulties in the divestment process.

As a result, the ministry has drafted a more proactive approach to capital transfer. Instead of selling each type of share separately, it proposes selling in blocks that include various types of shares, both strong and weak, to improve the chances of handling inefficient enterprises and promote restructuring. 

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