The Vietnamese government is to sell its stakes in companies ranging from a dairy giant to an insurance firm in a move worth up to US$3 billion, state media said yesterday, boosting the communist nation’s privatization drive.
Growth in the Southeast Asian country has been bucking the trend in the region, with GDP rising by 6.81 percent in the third quarter, backed by strong exports and the service sector.
Vietnam is in the process of easing business regulations as part of its long-running privatization drive and the newly announced plans are to remove its hold over several major companies.
The Thanh Nien newspaper yesterday said the government would “obtain up to US$3 billion by pulling out capital from 10 enterprises” including dairy giant Vinamilk, the leading Bao Minh Insurance Corp and FPT Telecom.
The majority of the US$3 billion would come from Vinamilk — the most successful dairy company in Vietnam — according to the state-run publication, which cited a decision signed last week by Vietnamese Deputy Prime Minister Vu Van Ninh.
Senior economist Le Dang Doanh told reporters that the sales “will help accelerate the process of privatization of public enterprises.”
He added that the government plans to privatize up to 429 enterprises this year, but appears to be running behind schedule.
Despite its racing economy, Vietnam remains dominated by huge and often sclerotic state-owned enterprises.
In a move to open up to overseas investment, Vietnam in June said it is to end restrictions limiting foreigners from owning more than 49 percent of locally listed companies.
The timeline of the government’s withdrawal from these 10 companies is not yet clear.
Vinamilk was valued at US$5 billion last year and reported annual growth of 22 percent last year.
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