Prime Minister Nguyen Tan Dung requested that the State-owned Electricity of Vietnam Group (EVN) complete its plans to withdraw capital from several non-core businesses by 2015.
EVN facing difficulties in pulling out capital from ABBank
Dung made the request in a decision to approve EVN’s restructuring plan for the 2012-2015 period.
As a result, EVN must complete capital withdrawal from An Binh Commercial Joint Stock Bank (ABBank), An Binh Securities Company, Global Insurance Company (GIC), Saigon Vina Real Estate Company, Central Power Real Estate Joint Stock Company (LEC), and EVN Investment and Construction Joint Stock Company by the end of 2015.
The restructuring plan aims at ensuring that EVN concentrate on more effective investment in its core business of power production and trading in order to better to serve society and the economy.
The plan estimated that EVN would have assets worth VND143.4 trillion (USD6.9 billion) after the restructuring.
In early 2012, EVN sought approval from the State Bank of Vietnam in HCM City to hand over its 5.37% stake in ABBank to HDBank. However the proposal was turned down for failing to meet requirements.
In early July, Dinh Quang Tri, EVN’s Deputy General Director, said at a seminar on the group’s restructuring that EVN is facing difficulties in the process of capital withdrawal.
By that time, EVN’s investment in securities, banking, insurance and real estate totalled VND1.1 trillion (USD52.7 million), including VND757 billion (USD36.3 million) in ABBank.
By the end of last year, EVN held a 24.3% stake in ABBank. The group was seeking approval from the Government to sell its shares in the bank at VND10,000 each in order to reduce its stake in the bank to 20%. However, the bank’s share price on the OTC market is much lower than the expected selling price of VND10,000 per share.
EVN had bought shares worth VND125 billion (USD6 million) or a 22.5% stake in GIC. EVN now plans to cut its stake to less than 20% by the end of 2015 by selling a part of its stake to a German company, ERGO International AG. The plan must first be approved by the Ministry of Finance as the German firm already owns a 20% stake in GIC.
EVN has also invested VND103 billion (USD4.9 million) in LEC and EVN Land Saigon. EVN has decided to allow LEC to sell off all its assets and return the capital to shareholders. By the end of last year EVN held a 4.3% stake in LEC.
Under the decision, the PM also allowed EVN to retain its dealings in four major business spheres, with 14 subsidiaries and one holding company.
EVN is authorised to wholly own nine enterprises, hold more than 50% of chartered capital in five companies and 50% in six companies.
The group must submit a detailed plan to complete the restructuring by the fourth fiscal quarter.
