Vietnam PM approves new restructuring plan for state owned firms

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Prime Minister Nguyen Tan Dung has approved a three-year restructuring plan for state-owned corporations that focuses on equitization and withdrawing non-core investments.

The plan aims to reorganize companies with "more reasonable structures" into focusing on their key business, supplying basic products and services to the society and ensuring national security and defense," according to a Saturday report on the government website.

The plan reaffirms that the "central role" of state-run enterprises (SOEs) in regulating and stabilizing the macro economy would be maintained.

It divides state-owned companies into three groups. In the first group, the government holds 100 percent of the chartered capital and operates in the fields of state monopoly, national defense and security; publication; transport safety; lottery; large-scale electricity generation and distribution of special significance to socio-economic development, national defense and security; management and exploitation of national railway infrastructure; airports; first-grade seaports; and money printing.

The second group includes enterprises in which the government holds a majority stake (more than 50 per cent) and and the third group lumps SOEs operating inefficiently and suffering from prolonged losses.

The government will categorize the enterprises and facilitate their equitization.

The companies have been asked to submit a restructuring plan to the government within the third quarter this year that includes an action plan for solving financial problems during the process.

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All SOEs will have to withdraw their non-core investments by 2015.

The plan instructs companies with financial difficulties to identify responsibilities of involved officials and study the investment situation to make necessary modifications.

The PM has called for determined action in the restructuring process , declaring bankruptcy where needed.

The renewed restructuring effort comes in the wake of state-owned Vietnam National Shipping Lines (Vinalines) reporting e losses of more than VND1.4 trillion over the first half of this year. It earned VND11.6 trillion in revenues, equalling 97 percent of the figures for the corresponding period last year. Vinalines attributed its losses to sluggish market demand and lower transportation fees.

In June, Interpol put out an international warrant for Duong Chi Dung, former director of Vietnam Maritime Administration . Dung went into hiding following accusations of financial wrongdoing when he chaired Vinalines between 2005 and February 2012.

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