PetroVietnam must pull out of finance, stick to oil

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Vietnamese state-run energy firm PetroVietnam must cease work at its finance arm PetroVietnam Finance Corp (PVFC) and instead concentrate on its core oil and gas businesses, the government said on Wednesday.

Vietnam said in July it would require all state-run companies, many of which are burdened with huge debts, to pull out of their non-core operations by 2015, and ban them from investing in shares, banks, property and insurance.

Hanoi-based PetroVietnam, one of the country's biggest state firms and one of its most heavily indebted, was told not to "maintain PVFC", and that it should submit a restructuring plan this month, the government said in a statement.

It did not say if PetroVietnam would sell PVFC, which is 10 percent owned by Morgan Stanley, or dissolve it.

Neither government officials nor PetroVietnam executives were immediately available for comment.

PetroVietnam must focus on its core activities, which are oil and gas exploration and production, petrochemical activities, electricity generation, and oil and gas services, the statement said.

PetroVietnam holds a 78 percent stake in PVFC. It also owns 20 percent of Ocean Bank.

PVFC may become a bank and issue shares to raise its registered capital by 50 percent to VND9 trillion (US$431.9 million), state media reported in May.

Vietnam's 12 largest state-run groups had combined debt of VND218.7 trillion ($10.5 billion), or 8.76 percent of the banking system's total loans as of September 2011. PetroVietnam accounted for nearly a third of that debt, the Finance Ministry has said.

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