Saigontourist and other state firms in the city have been given until the end of 2015 to withdraw nearly $70.2 million invested in non-core business.
Ho Chi Minh City government has ordered its state-owned enterprises to speed up divesting from non-core areas while the mayor of Hanoi threatened to suspend any leader of the SOEs slated for privatization who delays the process.
The municipal government said in a statement that it asked local SOEs to raise VND1.48 trillion (US$70.2 million) by selling stakes in non-core businesses by the end of 2015. Similar public share sales last year of 14 SOEs earned just VND30 billion.
The businesses have blamed the delay of divestment on the difficulty in finding investors.
Most of the non-core investments were made in the banking, real estates and financial markets which have been struggling for several years.
The city's top tourism firm Saigontourist is required to withdraw VND184 billion from two local real estate firms, VND40 billion from budget carrier Jestar Pacific and nearly VND12 billion from Saigon Medical Investment JSC.
Tourism and commerce group Ben Thanh is to recover VND246 billion it has pumped into banking and real estate.
Saigon Trading Group, a leading retailer, also has about VND507 billion in stakes in various banks and investments in real estates and capital funds.
The city plans to sell shares of 15 SOEs this year and another 15 in 2015. It is also scheduled to liquidate seven state firms, have nine others file for bankruptcy, sell five and restructure four during the period.
The Vietnamese government is accelerating share sales as part of efforts to restructure the economy and lure more international investors to the country's stock market. It plans to sell stakes in 432 government-owned enterprises by the end of next year.
However, share sales of SOEs have missed their targets largely due to their failure to generate interest from foreign investors. The Vietnamese government raised just VND1.36 trillion from 24 IPOs this year through April 23, about 35 percent of the VND3.9 trillion it targeted for the offerings, according to Bloomberg.
The process of selling shares of SOEs has slowed down significantly in recent years after more than 800 were equitized in 2004-05. The number dropped to 13 in 2012 and only three last year.
Nguyen The Thao, Chairman of Hanoi People's Committee, said he will consider suspend SOEs executives who who throw a spanner in privatization works in the capital city.
A Lao Dong report cited Thao as saying that the equitization in Hanoi has been “slow and not meeting schedule.”
Equitization is the term Vietnam uses to describe the process of issuing shares to partially privatize state-owned businesses in which the government will still hold the majority stake.
He blamed the executives' lack of determination and focus for the delay.
“Those who don’t follow [the policy] or are late to [privatize their firms] can be suspended and replaced.”