Govt introduces directions to beef up SOEs restructuring

Accordingly, the Government agreed with the withdrawal of State capital from equitized enterprises which have not been listed in the securities market and handed over to the State Capital Investment Company (SCIC):

Batch divestment will be carried out on the basis of the following principles: (1) public auction; (2) applicable to enterprises in which the State does not necessarily hold shares or controlling shares; (3) procedures for public offering is not required for batch auction.

Public auction will be carried out for part of the shares which are expected to issue, the rest (up to 70% of the total shares which are expected to sell) will be sold to employees with long-term commitment to work in the equitized enterprise after divestment.

Enterprises whose equitization plans have already been approved by competent authorities and have not had opportunities to organize initial public offering (IPO) immediately, share price to their employees and unions will be equivalent to 60% of the starting price under equitization plan.

Warranty costs of products, services and utilities from the point of business valuation to the point of official transformation into a join-stock company, will be deducted by the equitized enterprise according to siged contract and transferred to the joint-stock company than performs the warranty under the contract.

Where the real value of long-term capital of the equitized enterprise in other enterprises is determined lower than the book value, the value of long-term capital shall be the real value.

The valuation of capital contributed by an equitized enterprise into a joint-stock company havingshares listed on the UPCoM (Unlisted Public Company Market) which are not valid within 30 days before the date of business evaluation will be determined in accordance with Clause 1, Article 33, Decree No. 59/2011/ND-CP dated July 18^th, 2011 by the Government.

Within 60 working days from the time that first-time business registration certificate is granted, an equitized enterprise must complete the financial statement at the time of business registration, conduct financial statement audit, request tax finalization by tax authorities,implement the finalization, determine value of the state capital at the time of official transformation into a joint-stock company and financial issues to address.

Owner’ representativeshall select consultants hired to develop divestment plans. Divestment costs will be decided by owner’ representative and deducted from the value of the state capital divested, the owner will be responsible before the law forits decisions.

Continue selection of consulting organizations to calculate business values during the equitization process as stipulated in Clause 2, Article 1 of Decree No. 189/2013/ND-CP.

Ministers, Heads of ministerial-level agencies and Governmental bodies, Chairmen of People’s Committees of provinces and centrally-governed cities will select consulting organizations for equitization, select auction organizations to join the equitization process of State economic groups and corporations and some companies operating in insurance, banking, telecomunicatio, etc.

The Ministry of Finance will take prime responsibility and coordinate with relevant ministries and agencies to develop the Prime Minister’s draft Decision for the implementation of the above measures, then submit it to the Prime Minisrer for issuance in June 2015; review, evaluate and amend Decree No. 59/2011/ND-CP; Decree No. 189/2013/ND-CP, and Decree No. 71/2013/ND-CP, and submit them to the Government for issuance in 2016./.

By Quang Minh