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Vietnam Airlines equitisation explored

Ngày cập nhật: 14/06/2014 17:06:37
The Ministry of Transport just announced the value of national flag carrier Vietnam Airlines (VNA) at nearly $2.75 billion. Minister of Transport Dinh La Thang shines further light on the next steps in the airline’s shakeup plan.

With the financial market still struggling, do you believe VNA’s equitisation will meet expectations?

I strongly believe VNA’s equitisation plan will be a success if the capital ownership transfer is implemented according to the same process commercial banks have used.

So, what is the VNA equitisation plan?

The state will retain a 75 per cent stake in VNA, and sell the remaining 25 per cent pursuing existing regulations on equitisation.

At present, the financial market is still unfavourable, we will likely sell a 2-3 per cent stake at first to test the market, gauge investor response and wait for better conditions.

This is similar to the process we have seen with equitising commercial banks. Initially several small blocks of shares were released, and when conditions improved more were sold.

After being equitised, VNA will see a turnaround in corporate governance, shareholders will keep a close eye on VNA operations, and operational transparency will make the company’s stock appealing to investors.

Finding foreign strategic partners is a key factor in equitisation. Is this doable for VNA at a time when Vietnam’s aviation market is not yet fully developed?

Our approach is to first equitise VNA, and the firms more efficient operation in the post-equitisation period will help lure investors.

With a population of nearly 90 million and only a few airlines in the market, Vietnam still has great aviation potential. When putting their capital somewhere, foreign investors not only look at a firm’s capacity, but at their development perspective as well.

The Ministry of Transport (MoT)’s commitment to equitise member firms has been praised by the government. Just this year it is planning to restructure 11 major members. What is the progress on this endeavor?

In the first quarter of this year the MoT approved the restructuring plans of 11 parent companies of MoT’s 11 construction corporations, except VNA. I just signed the valuation document for VNA, which is an important initial step in equitisation.

Further efforts will be made to list VNA stock, and the stock of other equitised businesses on the stock market this year.

To ensure progress, you have said many times that the leaders of equitising firms will face dire sanctions, including removal if they are not effective at this process. Has anyone yet incurred sanctions?

MoT leaders issued a resolution that chairpeople and general directors of firms failing to progress in equitisation would face being removed from their positions.

Thus far, equitisation is moving according to our set timetable.

I hope that when the deadlines come, at the end of this year and next year depending on firm plans, no one will need to be sanctioned.