Vinafood 2 to divest from non-core sectors by 2015

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Vietnam's top rice exporter Vietnam Southern Food Corporation (Vinafood 2) said it will withdraw from its non-core investments and unprofitable businesses by 2015, a news web site reported Sunday.

The state-owned company will withdraw all of its investments in banking, securities, tourism and transportation in order to focus on processing and trading rice and seafood, according to the web site, thesaigontimes.vn.

The food company plans to divest from eight companies, including six joint-venture businesses.

The move comes as Vinafood 2 plans to partially privatize itself and three state-owned subsidiaries by selling 25-35 percent stakes of each firm to the public in 2015.

In early July, the Vietnamese government ordered all state-owned companies to equitize and divest from non-core investments by 2015 to concentrate on their core businesses.

The order came after many state-run groups faced losses last year. Local media cited Finance Ministry's data that they had invested an estimated VND22 trillion ($1.05 billion) in non-core sectors as of December 2010.

According to a Ministry of Finance report, debts of state-owned enterprises reached VND415 trillion as of September 2011, making up around 17 percent of the banking system's total outstanding loans.

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