According to the Ministry of Finance, weak and inefficient firms should go bankrupt if the equitisation process fails.
Dinh Vu Polyester Fibre Plant
Dang Quyet Tien, deputy head of the Department of Entrepreneurial Finance, under the Ministry of Finance, said the most profitable deals had already been put on sale and now they were having to push the less desirable deals in order to minimise losses.
By the end of 2015, the state’s divestment process from major sectors include real estate, finance and bank, insurance and stock markets had only achieved only 40% of it target. Ineffective businesses or firms that are debt ridden obviously find it hard to attract investors. In addition, there are firms that face investigation for corruption so investment issues have been delayed. Most of the wrongdoings were carried out by 2011.
Talking about ineffective projects such as Thai Nguyen Iron and Steel JSC or Dinh Vu Polyester Fibre Plant, the ministry tried to explain that the state hadn't make direct investments. These decisions were made by member companies of state-owned firms. However, they are still tied to the country's interests so if the equitisation process fails, they'll let them go bankrupt.
Tien said they would not punish business leaders who had followed all regulations and rules even though they incur losses.
The equitisation process is facing some difficulties as several state agencies were reluctant to divest. For example, the Ministry of Construction still holds a 90% stake in the Vietnam Machinery Installation Corporation (Lilama) while many investors have expressed the desire to enlarge their share.
Tien urged to re-exam the consultancy process if firms fail to find investors. "If a firm fails to sell their stake twice then it'll negatively affect the firm's image and make the equitisation process harder," Tien said.
