(Reuters) – Vietnam’s government will divest all of its shares in Vinamilk, one of the country’s most sought-after equities, state media reported on Tuesday, in a rare sign of openness by the state towards relinquishing controls on major firms.
Vinamilk, or Vietnam Dairy Products JSC, the top listed company by market value, is 45 percent owned by the government, with the largest other shareholder F&N Dairy Investment, a unit of conglomerate Fraser and Neave, with 9.54 percent.
Minor stakeholders include asset management firms of Templeton and J.P. Morgan Singapore.
Vinamilk dominates the local market and its value has climbed 10 times over the past decade, from $500 million in 2006 to around $5.47 billion now, making it a rare success story in a state sector plagued by bad debt, inefficiency and low profitability.
Online news sites of state-controlled media cited a directive signed by a deputy prime minister sent to the government’s State Capital Investment Corporation (SCIC), instructing it to divest from 10 firms, including Vinamilk, its 6 percent stake in technology conglomerate FPT Corp, and its share of unlisted subsidiary FPT Telecom.
Reuters could not immediately verify the reports and Finance Ministry officials were not available for comment.
The reports gave no timeframe for the divestment, which would be worth about $2.5 billion in Vinamilk alone.
Analysts have anticipated large foreign interest in Vinamilk once shares become available. It is widely considered Vietnam’s most attractive listed firm, in contrast to many companies with large state ownership.
A vaunted programme to partially privatise, or “equitise” hundreds of State Owned Enterprises (SOEs) has failed to reach targets and many investors have been put off by poor transparency, small stakes on offer, or unrealistic valuations.
Airports Corporation of Vietnam, one of the country’s biggest SOEs, last week won approval to hold an initial public offering, but only 3.47 percent would be sold to the public, the same size stake offered by flag carrier Vietnam Airlines in its 2014 IPO.
The current 49 percent foreign shareholding ceiling in Vinamilk has long been taken up and new rules allowing up to 100 percent foreign ownership in many sectors remain muddied, with investors awaiting clarity on definitions and regulations. (Reporting by Martin Petty and Mai Nguyen; Editing by Mark Potter)
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