Accordingly, the representative of T&T Group suggested the State buy back all 5.04 million shares sold to the strategic shareholder with the share price of VND11,000 (roughly $0.48) per share, which makes up a total value of VND55.44 billion ($2.4 million) as mutually agreed in the sale agreement.
The State was asked to buy back additional 3.6 million shares of the Central Transport Hospital (CTH) that T&T Group purchased at the auction with the winning bid amount of $4.1 million.
CTH was the very first state-owned health institution to be privatized in Vietnam. In its initial public offering (IPO) on the Hanoi Stock Exchange on 2015, the hospital successfully raised its charter capital of $5.2 million through sale of 29.48 per cent of shares.
Under the plan of equitization of CTH, the State was to hold 30 per cent of the charter capital, equivalent to 5.04 million shares; 10.52 per cent of charter capital was to be sold to employees; the remainder 29.48 per cent of charter capital equivalent to 4.95 million shares was to be auctioned in the IPO.
As for T&T Group acted as the strategic shareholder, it bought 5.04 million shares, equivalent to 30 per cent of charter capital. Together with additional 3.6 million shares bought through auctioning on the Hanoi Stock Exchange, it is holding total 8.64 shares, equivalent to over 50 per cent of shares which are equivalent to paid value of $6.5 million.
However, according to the calculation of the Ministry of Transport, after finalizing the official development assistance (ODA) project on construction and upgrade of the hospital and accounting for the costs of equitization, the charter capital of CTH will increase from $7.3 million to $17.1 million, of which $12.2 million will be contributed by the State, accounting for 71.12 per cent of the charter capital.
Therefore, after the charter capital increase, T&T Group's stake in the hospital will decrease to 28.88 per cent, equivalent to holding 8.64 million shares and paid value of $6.5 million.
With this rate of ownership, T&T Group will have no right to veto and no voice in the running the hospital. This is the main reason for T&T's decision to divest.
According to Do Quang Hien, Chairman of T&T Group, the conglomerate embraced many ambitious plan when deciding to invest in the health sector, specifically CTH. The Group had worked with Japanese consultants to create a thorough restructuring scheme for the hospital.
He said, "T&T's top desire is to create an international quality hospital which, in part, will enable patients to be treated domestically, without the hassle to go overseas to look for a higher quality service."
"However, with the policy not to reduce state capital at the CTH, 70 per cent of the hospital's stake will belong to the State. With only 30 per cent stake, it will be difficult for T&T Group to participate in additional investment, and the hospital management," said Hien.
Based on the opinion of Tran Tuan Anh, member of the National Assembly, once the right to veto (owning over 36 per cent of charte capital) and the right to decide (owning over 50 per cent of charter capital) of investors are controlled, it will be difficult to attract investors to participate in the socialization of public sector investment.