VietNamNet Bridge – Big state-owned
economic groups and general corporations have stated that they are striving to
complete the equitization process in 2011. However, doubts have been raised
about the feasibility of the plan, since the stock market is still facing big
difficulties.

Under the
plan of equitizing state-owned enterprises (SOEs) which has been approved by
the Prime Minister, in 2011-2012, the Vietnam Construction Industry Group
(VCIG) will equitize nine SOEs, including Lilama, Licogi and Coma. Meanwhile,
Duong Khanh Toan, General Director of VCIG, said that the group’s leaders have
decided that the equitization of the three big general corporations will be
completed in 2011.

However,
Toan admitted that he is not sure if the plan can be fulfilled in this year
because the success of the equitization plan will still depend on the macro
economy and the stock market’s performance. One of the most important goals of
equitization is to bring the highest possible surplus to the State.

Meanwhile,
it is not very likely that the stock market will be bustling in 2011. As the
inflation rate is forecast to be high in 2011, the interest rates will not go
down as expected. This means that the cash flow to the stock market will slow
down, thus making the market gloomy, and a gloomy stock market will badly
affect the equitization of SOEs.

After a lot
of delays, MobiFone has shown its determination to complete its equitization
this year. Meanwhile, Minister of Information and Communication Le Doan Hop has
also affirmed that MobiFone must be equitized in 2011 in order to improve the
competitiveness of the enterprise.

In order to
make the equitization plan realistic, according to Hop, in March, the
ministry’s leaders will sit together with MobiFone’s managers and relevant
ministries to discuss the detailed plan on equitizing MobiFone.

The Vietnam
Airline Corporation, which also made a lot of delays, has also announced that
it will restart the equitization plan.

According
to Nguyen Si Hung, Chair of the Board of Members of Vietnam Airlines, said that
the air carrier was named in the list of the SOEs that needed to be equitized
in the 2007-2010 period. However, due to many reasons, including the
unfavorable conditions in the stock market, which might badly affect the IPO
(initial public offering) plan, the equitization plan has been delayed many
times.

As
instructed by the government, Vietnam Airlines once again is building up an
equitization plan that it will submit to the government and ask for permission
to equitize in 2011-2015. If the plan is approved, Vietnam Airlines will kick
off the plan in 2011.

However,
Hung said that the equitization plan will still depend on many factors.
Especially, the success of the plan will much depend on the “support” from the
stock market.

The
“equitization quality” is always the top priority for all the equitization
deals, and enterprises need to be sold at the best possible prices. This means
that big economic groups and general corporations need to keep a close watch
over the market and grab opportunities to make IPOs successfully.

Nevertheless,
the calculations of big enterprises may not come true especially when there are
two big problems.

First, to date, the document, which is expected to replace the currently valid
Decree 109 on equitizing SOEs and help settle the current problems in the
equitization process, has not been issued yet. The management agency has not
given the final answer about when the legal document will be issued.

Second, the
moves conducted recently by the government to control inflation will surely
have negative impacts on the stock market, which will badly affect the
equitization process. Therefore, people have every reason to doubt that the big
guys may once again fail to keep their equitization appointment in 2011.

Ngoc Ha