Vietnam plans to set up a working group to help spur share sales of state enterprises as the government takes steps to bolster a flagging privatization program and drive economic growth.
“It will help state companies sell stakes more successfully,” Dang Quyet Tien, deputy general director of the finance ministry’s corporate finance department, said in an interview on Oct. 24. “What’s the point of pushing the IPOs out only to see them fail; we aim to avoid the failures that happened earlier this year.”
Prime Minister Nguyen Tan Dung had outlined a revamp of state enterprises to spur growth in aneconomy on course to expand below 7 percent for a seventh straight year. The privatization plan has lagged the government’s target, with only 71 state-owned companies selling shares in the nine months through September, short of a goal of 200 by year-end.
The working group will be established “in the near future,” Tien said, without giving a specific time frame. It will comprise members from the finance ministry, the State Securities Commission and the two stock exchanges in Hanoi and Ho Chi Minh City, he said in his office in Hanoi.
Vietnam’s economy expanded 5.62 percent in the nine months through September from the same period a year earlier, data showed last month. The government aims to boost full-year growth to 5.8 percent in 2014 and 6.2 percent next year.
Officials announced a plan in February to sell shares in as many as 432 enterprises by the end of 2015. Of the 36 state companies that have held initial public offerings through Sept. 22, trading is yet to start in any of them. Vietnam has raised 3.14 trillion dong ($148 million) from these sales, compared to a target of 4.74 trillion dong.
The proposed working group will scrutinize companies’ preparation for the stake sales and “flag any problems that would potentially cause the IPO to fail,” Tien said. It will also help the firms to undertake better marketing of the offers and “actively approach” and connect with potential investors, he said.
“The sooner we form this working group, the better we can help companies to quicken stake sales and IPOs,” Tien said.
Source: http://www.bloomberg.com/