State Capital Investment Corporation (SCIC) decided to divest a 9 per cent stake in Vietnam Dairy Products JSC (Vinamilk) in December.
SCIC’s intention was announced by deputy director Nguyen Hong Hien at the October 25 conference on state-owned capital divestment and listing on the stock exchanges.
Thereby, both the Ministry of Finance (MoF) and SCIC refute Vietnam Association of Finance Investors (VAFI)’s proposal for an alternative plan for the Vinamilk divestment.
Accordingly, VAFI proposed the MoF and SCIC to sell the entire state-owned stake in a single bulk instead of dividing it into several smaller pieces as planned by SCIC.
According to VAFI, foreign strategic investors will not be interested in buying minority stakes in stated-owned enterprises because it prevents them from joining management boards. In case these investors join the sales, they will not pay very high prices for minority stakes in Vinamilk.
VAFI added that by selling Vinamilk stakes in small pieces at a time the state may earn $1 billion less than by pouring the whole 45 per cent on the market at once.
The government currently holds a 45.1 per cent stake in Vinamilk (HoSE: VNM). The company is one of the country’s most sought-after equities and foreign investors have long been interested in Vinamilk thanks to its strong prospects and expansion plans.
Vinamilk’s board of directors formally approved the removal of the 49 per cent foreign ownership cap in late June, paving the way for an expected surge of interest from overseas investors in the local company.
Photo: CBR Investment AG