SCIC unveils first phase of its divestment plan

HANOI: The State Capital Investment Corp (SCIC) has announced its first phase of divestments for 2023, which includes 73 enterprises with some high-profile companies in the stock exchange.

The companies that can catch investors’ eyes include Binh Minh Plastic JSC, Vietnam Seaproducts Joint Stock Corp, LICOGI Corp JSC, Pha Lai Thermal Power JSC, Hai Phong Thermal Power SJC and Quang Ninh Thermal Power JSC.

The government’s investment arm has successfully completed divestments in several enterprises.

They include Quang Ngai Road Management and Construction JSC (29% of capital), II Quang Binh Road Repair and General Construction JSC (53%), Quang Binh Road Maintenance and Complex Construction JSC (65%) and Inland Waterways Management Maintenance JSC N09 (51%).

However, SCIC’s list is currently lacking the so called “blockbusters” that are highly sought-after by both domestic and foreign investors, such as FPT Corp, Vinamilk, Tien Phong Plastic JSC and brewer Sabeco. These are also the companies that offer high dividend rates to SCIC.

Since 2018, the equitisation of state-owned enterprises through divestment of state capital on the stock exchange has been at a standstill, which has made the stock market unattractive to new investors, particularly those from abroad.

SCIC chairman Nguyen Chi Thanh said: “There is a need for the SCIC to facilitate indirect investment and be transformed into a state-owned investor that can compete with foreign investment funds.”

As of Dec 31, 2022, SCIC’s portfolio comprises 119 enterprises, with a state capital of 47.8 trillion dong (US$2bil or RM8.87bil) out of a total charter capital of 166 trillion dong (RM31.3bil).

It reported revenue of 10.7 trillion dong (RM2bil) in 2022, up 51% on-year and surpassing the annual target by 35%.

In 2023, SCIC has set lower targets of nearly 6.7 trillion dong (RM1.3bil) in revenue and 2.9 trillion dong (RM547mil) in after-tax profit. — Viet Nam News/ANN