Vietnam eyes sell-off in 500 state firms this year
HANOI - Vietnam hopes to sell stakes in 500
state-owned enterprises this year as part of efforts to streamline the
sector, an official said on Tuesday.
The official from the Steering Committee for Enterprise Reform under
the Government Office said new regulations had quickened the process
of ``equitisation,'' Hanoi's preferred term for the partial or full sell-off of
state firms.
He told Reuters that 144 state firms had been equitised to date, with
the figure at 120 by the end of last year.
The process has been proceeding slowly but gained pace late last year,
according to official figures, which showed 53 companies undergoing
equitisation in December alone. Only four firms from the total had been
fully privatised by the end of last year.
Aid donors have urged Vietnam to stop giving the country's some
5,500 state enterprises preferential treatment such as easy access to
bank credit.
But much to the dismay of donors, Vietnam has said state-owned
enterprises would still play the leading role in the economy. Under
equitisation the government has been slowly allowing management to
sell stakes in mainly small firms.
``The target for this year is quite high, but we are sure more than 400
firms will complete the equitisation process,'' the official said. The
overall target was 500, he added.
The official data showed most of the equitised firms were small. The
largest had investment capital of around $8.6 million.
In a report released late last year, the World Bank said Vietnam's state
companies were burdened with debts of $7.3 billion at the end of 1997
and that a slowing economy made the operating outlook bleaker.
The report said 60 percent of the firms were unprofitable even before
economic growth had slowed last year.
Reuters - February 09, 1999.
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