State firms in Vietnam having problems finding strategic partners

State firms in Vietnam having problems finding strategic partners

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The latest reports suggest that state-owned enterprises in Vietnam are experiencing difficulties finding strategic partners. It has been reported that Vietnam Airlines is one of over 430 state-owned enterprises which is scheduled for privatization by the end of 2015. The country’s carrier has been looking for strategic partners in order to implement its initial public offering – which is scheduled in September 2014 – after about seven years of delay.

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The general director of Vietnam Airlines, Nguyen Ngoc Minh said that the national flag carrier was looking for an international airline to be its strategic partner, but the company was also open to financial investors. In a meeting in April 2014, the chairman of the airline, Pham Viet Thanh said that finding strategic partners was of utmost importance for the September 2014 IPO and went on to say that in case no strategic partners are found by September 2014, the IPO will still be implemented.

The country’s carrier – under the equitisation plan which was pending for approval before the Prime Minister – was allowed to sell about 20 to 30 percent of stakes in its IPO, which is not lucrative enough option for strategic partners. Vietnam Airlines is one of six main flag carriers in the region which is not publicly listed.

The airline has an estimated value of around US $2.7 billion as of March 31, 2013.

Photo Credits: Traveldailynews