In Decision 58/2016, the new Prime Minister has pushed for much further divestment of State capital in existing State-owned enterprises (SOEs) in various sectors. In general, Decision 58/2016 reduces the industries where the State must maintain a minimum level of ownership interest and, more importantly, publishes a list of about 240 SOEs where the State may sell down its ownership interest by 2020. In comparison with Decision 37/2014:
- The State can now sell all of its capital in existing SOEs operating in (1) urban cleaning, urban sewage or urban lighting sectors, (2) supplies of clean water, (3) exploration of natural resources, (4) production plant seeds or vaccines, (5) international shipping and (6) rail transportation. Previously, the State can only sell down to 50% charter capital of SOEs operating in these sectors.
- The State can now sell down to 50% charter capital of SOEs operating in (1) chemical production, (2) air transportation, (3) tobacco production, (4) telecommunication services, (5) SOEs with 30% or more market shares in wholesale of rice, import and distribution of petrol, and (6) retail of electricity. Previously, the State can only sell down to 65% charter capital of SOEs operating in these sectors.
- The State will now only hold 100% charter capital in SOEs operating railways infrastructures which are invested by the State. This suggests that private investment in railways infrastructure is encouraged.
- The State may sell up to 35% ownership interest in Vinacomin (the largest mining company), PetroVietnam Exploration Production Corporation, and Agribank (the largest bank in Vietnam in terms of network).
- The State may sell up to 50% ownership interest in Vinachem (the largest chemical and fertiliser producers), Vinataba (the largest tobacco producer), Mobifone and VNPT (the second and the third largest telecom service providers), and Vinacafe (a large coffee producer).
- The State may sell all of its ownership interest in PetroVietnam Power, Hapro (a large retail and trading group in Hanoi), Satra (a large retail and trading group in Ho Chi Minh City), three large generation companies of Vietnam Electricity, Vinashin, Vincem (State-owned cement producers), PVOil (a petrol importer and distributor), Dung Quat Refinery (the first and largest oil refinery in Vietnam), VTVCab (the State-owned cable tv operator), Song Da Corporation, and Hanoi Housing and Urban Development (HUD).
This post is contributed in parts by Tran Trong Linh, a legal intern at Venture North Law.