Vietnam's EVN given order to withdraw from bank, property firms

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Vietnam took another step on November 23 toward revamping its state-owned enterprises as the government ordered power utility EVN to completely pull out of the financial and real estate sectors by 2015.

Under a plan approved by the prime minister, the group, formally known as Electricity of Vietnam, will have to divest from six companies and institutions, including An Binh Bank, An Binh Securities Company, Global Insurance Company and EVN Land Saigon.

The plan aims to give EVN a "reasonable structure" that will allow it to focus on electricity production and become more efficient, the government said in a post on its website.

The divestment order is consistent with the government's bigger plan to have all state-owned companies to withdraw from non-core business activities.

Despite continued calls for breaking the monopoly on power sale, the new plan still allows EVN to be the sole owner of all electricity transmission and distribution companies in the country.

EVN's losses totaled VND2.59 trillion (US$125.2 million) last year, the biggest among state-owned enterprises in Vietnam, according to official statistics. That brought the group's cumulative losses to VND38.1 trillion, also the largest in the SOE sector.

The group had VND99.26 trillion ($4.7 billion) of foreign debts, used to fund the construction of its new power plants, the Finance Ministry said earlier this month.

Power prices are currently subsidized by the government, but EVN has been allowed to set prices based on market conditions starting next year.

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