SOE restructuring brings M&A opportunities
By Hoang Phi - The Saigon Times Daily
HCMC – Many experts have considered restructuring and equitization of State-owned enterprises (SOEs) as a big opportunity for the M&A (mergers & acquisitions) activity in the coming time.
The Ministry of Finance has recently announced a plan to restructure 899 SOEs in the 2011-2015 period. In which, 367 enterprises will go public and 532 others will be transferred, sold, dissolved or go bankrupt.
According to a report of the ministry, 93 SOEs have registered to go public this year, including 22 enterprises under ministries, 33 firms under State-owned economic groups and corporations and 38 others under local authorities.
Those include firms drawing much attention of foreign investors such as Vinatex, Binh Son Oil Refining and Petrochemical Company, Viglacera and Lilama.
Earlier, Vietnam Shipping Industry Group, or Vinashin, has offered and sought partners to transfer shares at 32 companies it has invested in. The companies cover a wide range of fields such as investment fund, gas, tourism, industry, porcelain and oil-rig manufacturing.
Vinashin has also offered the market with 13 member enterprises and land of four other companies.
These are parts of restructuring scheme of Vinashin, a State-owned giant with over 200 affiliates. Vinashin aims to retain only 15 subsidiaries, two joint ventures, and two non-business units in 2013.
According to Pham Tuan Anh, deputy director of the Enterprise Renovation Department, compared to nearly 6,000 SOEs in 2001, the nation now has over 1,300 SOEs, of which 60% will have to go public in the coming time.
“The equitization process will be sped up, bringing investors a big chance to join M&A activity,” Anh said.
Andy Ho, managing director of VinaCapital, said the SOE equitization process, a key activity of the developing capital market in Vietnam, is entering the final stage.
“Liquidity of the stock market will improve, boosting M&A activity. In the next three years, there will be a great potential for IPOs (initial public offering) of SOEs,” Ho said.
VinaCapital is investing in four SOEs, Vinamilk, PetroVietnam Fertilizer and Chemicals Corporation, Lam Thao Fertilizers & Chemicals Company and Phuoc Hoa Rubber Company.
Andy Ho also listed some attractive SOEs such as Vinatex, Vietnam Airlines, Vinafood 1 and Satra. MobiFone is the most notable one with revenue of US$2.1 billion and pre-tax profit of US$386 million last year.