FPT officially decides to give up EVN Telecom deal

Published: 06/04/2011 05:00



VietNamNet Bridge – The commercial affair in which FPT plans to purchase EVN Telecom’s stakes has failed after FPT has released official announcement about the withdrawal from the deal.

FPT’s Board of Directors on April 6 adopted a resolution on withdrawing from the negotiations to purchase stakes from EVN Telecom and said FPT will soon follow necessary formalities to cancel the project.

Prior to that, the Prime Minister approved the equitization plan submitted by EVN Telecom, under which EVN will still hold the controlling stakes of 50.6 percent in EVN Telecom, while 0.4 percent of stakes will be sold to EVN Telecom’s workers, and 49 percent will be sold to the expected strategic investors FPT and FPT Telecom.

In a talk with the local press, Truong Dinh Anh, new General Director of FPT said that FPT has decided to abandon the project after it has found that the investment efficiency in the project is not as high as expected. However, Anh has emphasized that FPT still wants to invest in the mobile telecom sector after it withdraws from EVN Telecom.

Why did FPT decide to give up the project on investing in EVN Telecom?

We followed a four-step plan when investing in EVN Telecom: 1/ asking for permission from the government 2/ paying deposits to prove financial resources 3/ carrying out appraisal over EVN Telecom’s situation and 4/ negotiating the investment contract

After finishing the first steps of the plan, we have found out that the investment efficiency in the project will not be as high as expected. And in the morning of April 6, FPT’s Board of Directors adopted a resolution to withdraw from the deal.

How much money FPT has deposited for the deal?

In order to prove its financial capabilities, FPT deposited 708 billion dong.

However, many conditions in the agreement signed before between the two sides have fundamentally changed. We have not seen any legal foundation showing that we would not be able to take back the deposited money.

FPT once stated that it wants to enter the telecom sector especially to provide mobile services. It seems that the decision to withdraw from EVN Telecom is not in line with the strategy.

When kicking off the plan to purchase EVN Telecom’s stakes, we wanted to set foot in the telecom sector. When withdrawing from EVN Telecom, we knew we would have to seek other opportunities to join the telecom market.  Either we will purchase the telecom companies that are facing difficulties or we will ask for permission to build up a next generation mobile network.

The prices of FPT’s shares have increased after FPT decided to withdraw from EVN Telecom.  What would you say about that?

The verification of the plan on investing in EVN Telecom last six months, much longer than similar projects. During that time, FPT shares’ prices went up and down. We believe that investors always keep a close watch over the market to make reasonable decisions.

Source: VnExpress

Provide by Vietnam Travel

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