A production line of Vinamilk-brand fresh milk. (Photo: www.tienphong.vn)
The government-run State Capital Investment Corporation (SCIC) will divest the whole 45.1% stake it holds in Vinamilk (VNM), coupled with other nine companies, the Saigon Times newspaper reported, citing a restructuring plan signed by Deputy Prime Minister Vu Van Ninh.
SCIC will also pull out entire stakes from other nine firms namely Bao Minh Insurance Corporation (BMI), Vietnam National Reinsurance Corp (VNR), Tien Phong Plastics (NTP), Binh Minh Plastics (BMP), Vietnam Infrastructure Investment & Development JSC (VIID), Ha Giang Mineral Mechanics JSC (HGM), Sa Giang Import Export Corporation, FPT Corporation (FPT) and FPT Telecom.
The government also permitted SCIC to retain its holdings in other nine firms including Baoviet Holdings (BVH), Traphaco (TRA), DHG Pharmaceutical (DHG) and Domesco (DMC).
SCIC is estimated to book at least $4 billion from withdrawals from the ten firms, including $2.46 billion from Vinamilk, based on their market prices. These proceeds will help the government offset the state budget deficit this year and restructure domestic loans worth $2 billion that come due soon.
The withdrawal from Vinamilk signals that the government is willing to lower its stakes from other large companies where it holds controlling stakes or has a say in their management, the newspaper added.
Foreign ownership has hit the ceiling of 49% in Vinamilk, and overseas investors may be allowed to increase holdings in the firm as a decree issued in June removes the foreign ownership limit in a number of businesses.