This week, the Prime Minister approved the equitisation plan for Vietnam Airlines, the national carrier. It is planned that:

• The Government will retain 75% shares in Vietnam Airlines Joint Stock Company (VNAir JSC). The Ministry of Transport (MOT) is authorised to decide to further reduce the Government’s shares to 65% in an appropriate time after the equitisation;

• Strategic investors will hold 20% shares in VNAir JSC;

• The MOT will represent the Government’s shares in VNAir JSC. There is no indication that SCIC will replace the MOT in the future; and

• VNAir JSC is entitled to continue not to provide mortgages to the Government for the guarantees provided by the Government to finance for VNAir JSC’s acquisition of Airbus A321 until 2015. It is not clear if the Government will continue to guarantee all of VNAir JSC’s offshore borrowing obligations. If the strategic investor is foreign investor, then at law the Government can only guarantee for an amount of loan in proportion to Vietnamese’s equity interest (about 80%) in VNAir JSC.