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As reported in the results of equity conversion and divestment updated until July 2023 by the Department of Corporate Finance (MOF), there have been 29 companies granted authority to approve enterprise restructuring plans, including Vietnam National Petroleum Group, Vietnam Forestry Corporation, Vietnam National Shipping Lines under the Commission for the Management of State Capital at Enterprise, Vietnam Debt and Asset Trading Corporation under the MOF, Vietnam Construction Machinery Corporation (COMA) under the Ministry of Construction, and 24 enterprises under local authorities (Ha Tinh, Hoa Binh, Lai Chau, Ninh Thuan, Thai Binh, and Tra Vinh).

The remaining units are currently implementing the development of enterprise restructuring plans to submit to the competent authorities for consideration and approval.

Illustrative photo: Internet

Regarding the equitization situation, in the first seven months of 2023, the Department of Corporate Finance stated that units continued to implement equitization tasks according to the approved plan.

In terms of divestment, in July 2023, the State Capital Investment Corporation (SCIC) reported the implementation of divestment, remitting funds to the State budget at Binh Minh Plastic JSC, with a value of VND119.6 million VND, yielding VND1.46 billion. They also carried out investment divestment at Dien Bien General Trading and Tourism Services JSC with a value of VND6.7 billion, yielding VND22.1 billion.

In the accumulated seven months of 2023, State divestment was conducted in four enterprises with a value of VND8.8 billion, yielding VND19 billion; conglomerates and corporations divested in seven enterprises with a value of VND53.5 billion, yielding VND206.3 billion.

In terms of revenue from State capital sales, the plan to recover State capital from some economic organizations managed by the Central Government in 2023 is VND3,000 billion. The period from 2024 to 2025 is expected to yield VND11,987 billion.

The report noted that in the recent period, the progress of equitization and divestment has been slow, and there is a possibility that the set plans will not be achieved. Objective reasons included the significant instability of the domestic and international financial markets and the impact of the pandemic. Since the implementation of equitization and divestment depends on market conditions, it is necessary to choose the right time to sell shares to achieve effectiveness and ensure feasibility.

Furthermore, the specific characteristics of enterprises implementing equitization in this period, such as large enterprises with broad and diversified operations, specialized assets, and challenges in determining value, have also contributed to the situation. Some units violated regulations on capital and asset management and have been currently undergoing inspection, examination, and investigation. Small and medium-sized enterprises, which are suppliers of public utility products and services closely related to local activities, are also facing these issues.

In terms of subjective causes, the Department of Corporate Finance pointed out that the implementation by certain representative agencies of owners and the leaders of enterprises has not been sufficiently proactive or resolute in the implementation of equitization and divestment. There are still tendencies to evade responsibility and shift blame.

The review and planning for the restructuring of enterprises in the period of 2021-2025 have not received adequate attention from relevant agencies and units; the preparations for equitization and divestment are not well-performed.

Many enterprises have not completed the necessary legal procedures for rearrangement and the handling of assets, land, and properties in accordance with the law on the management and utilization of State-owned assets before equitization and divestment. There are still numerous financial difficulties and issues that have not been decisively resolved. The coordination between representative agencies of the owner and provincial/city people's committees, ministries, and relevant departments in resolving issues related to land use plans and addressing prolonged financial problems is not yet effective.

Therefore, in the upcoming period, along with addressing the existing limitations and challenges mentioned above, the Department of Corporate Finance suggested taking strict measures against cases that hinder or violate regulations regarding State equitization and divestment in enterprises. Clear responsibilities of the organizations and individuals involved, especially those in leadership positions responsible for restructuring, equitization, divestment, and reorganization should be determined.

The Department of Corporate Finance also emphasized the need to enhance transparency and disclose information about the financial status and business operations of State-owned enterprises to build trust and attract the attention of investors before implementing equitization and divestment activities.