Vietnam has allowed unlisted state-owned enterprises (SOEs) to issue shares in larger chunks to try to attract investors and breathe life into a vaunted state sector selloff that is lagging far behind schedule. Vietnam's communist government wants to reduce its stakes in SOEs, many of which have low profitability and high levels of bad debt. Its "equitisation" programme aims to raise capital, restructure inefficient firms and bring in strategic partners to make them more competitive.
The government divested only about 13 percent of the almost $1 billion worth of shares it hoped to sell this year, as of June, by which it had completed equitisation of only 61 of the 289 firms targeted. The new rules, reported on Wednesday on the government's news website, allow firms to apply to buy stakes of 25 percent or higher in state-owned companies, without having to publicise bids that could turn out to be unsuccessful.
Those sales would also take place on a stock exchange, ensuring greater transparency. The sales so far have drawn little interest from foreign investors, much to do with the small stakes on offer, the state keeping sizable controls and concern about vested interests. The initial public offering last year of flag carrier Vietnam Airlines, one of the country's best-known SOEs, raised just $51 million from local investors and saw barely any foreign bids for a stake of just 3.47 percent.
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