Private corporations flock to purchase shares of SOEs

By Minh An - Mar 03, 2018 | 09:23 AM GMT+7

TheLEADERThe wave of equitization of state-owned enterprises (SOEs) is creating opportunities for several private corporations to control SOEs and gain additional benefits for their value chain.

Private corporations flock to purchase shares of SOEs
Hapro Mart supermarket. Photo:

According to information from Hanoi Trade Corporation (Hapro), only one Vietnam Motor N.A Co.,Ltd (Vinamco) is eligible for strategic investor to hold dominant stakes of 65 per cent of Hapro's shares.

Vinamco, commonly known as West Lake Honda, is a related unit of the BRG Group, a corporation specializing in real estate investment.

This is not the first time businesswoman Nguyen Thi Nga's group had participated in buying shares to dominate SOEs. This group which is famous for its golf and hotel business previously acquired shares of Thang Long GTC, Intimex, Tran Phu Print and Vietnam Oil Services Tourism Company (OSC Vietnam).

Initial Public Offering (IPO) activities of SOEs have been stimulated in recent years. There are hundreds of businesses in all sectors having plan to equitize and divest the state capital for the period from 2017 to 2020, which open up opportunities for investors including domestic private corporations to hold dominant stakes in SOEs.

Vinafood II, the largest SOE in Vietnam's rice export market, recently chose T&T Group as its strategic shareholder. Sacom Company and U&I Investment Company are selected as strategic investors of Binh Duong Manufacturing & Import Export Corp (Protrade Corp) which is a multi-industry operation in Binh Duong province and will hold IPO on March 28.

Do Quang Hien's T&T Group is one of the active investors in buying SOEs' shares over the past few years. After spending VND490 billion (US$21.7 million) to buy a 98 per cent stake in Vietnam National Shipping Lines (Vinalines) from Quang Ninh Port, T&T continued to become a strategic shareholder of the Transportation Hospital, Viet Ha Beer, Agriculture Material Corporation (Vigecam), Vietnam Forest Corporation (Vinafor) and Vietnam National Vegetable, Fruit And Agricultural Product Corporation (Vegetexco).

This group also purchased 50 per cent of shares of Hanoi Investment and Import Export Company (Unimex Hanoi), a subsidiary of Hapro.

It can be seen that besides golden land, the investment of these corporations in SOEs adds value to their value chains.

Hapro not only owns large land in Hanoi and HCMC but also is a leading enterprise in exporting some agricultural products and foodstuffs with export turnover of nearly VND2,500 billion (roughly US$111 million) per year, which make Hapro become the acquisition target of BRG Group.

Meanwhile, T&T Group is expressing its ambition of organizing, operating production and distributing in a closed chain. It also wants to integrate high technology with its cultivation and processing of agricultural products. If becoming a strategic shareholder of Vinafood II, T&T Group will go further in the field of agricultural products.