Vietnam state firms dawdle over divestment from non-core areas

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State-owned groups are unlikely to complete withdrawal from non-core sectors by 2015 as envisaged in a government road map, an official has warned.

The government expects to complete privatization of public companies by 2020, but only after they pull out of non-core areas.

But they are unlikely to finish the task by 2015, Doan Hung Vien, deputy head of the Government Office's division for economic reforms, said, admitting the reform process is extremely slow.

Economic growth hit a 13-year low of 5.03 percent last year.

Vien said the government has approved the restructure plans of six out of the country's nine state-owned groups and eight out of 10 state corporations that have submitted them.

The six groups are in oil and gas, rubber, chemicals, electricity, coal and minerals, and textiles.

Oil and gas giant PetroVietnam plans to reduce the number of subsidiaries to 23 from 29 and second-tier subsidiaries to 126 from 206. It will make larger cuts of third-tier subsidiaries.

The group, known for its massive investment in non-core areas, especially finance and banking, will sell the 20 percent stake it holds in OceanBank and reduce its stake in the PetroVietnam Jointstock Finance Corporation to 20 percent from 78 percent in the next two years.

The Vietnam Rubber Group plans to pull out VND4.5 trillion from non-core areas by 2015, but will still have 1.5 percent of its chartered capital in such companies.

It will continue to withdraw from non-core activities after 2015, reducing its investment to 0.2 percent of capital.

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The group also plans to reduce the number of subsidiaries by almost half to 101 companies.

Vinalines, among the 10 state-run corporations to have divestment plans in place, will sell its stakes in 37 companies and bankrupt two of its shipbuilding subsidiaries Vinashinlines and Falcon.

If Vinalines does not restructure, it faces the threat of bankruptcy, British state broadcaster BBC quoted the group's deputy director, Le Anh Son, as saying late last month.

Vinalines reported a loss of $117 million last year, and is expected to continue losing in the next few years.

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