Nghe An's enterprise equitization progress is still slow.
(Baonghean) - Implementing the equitization roadmap according to Government regulations, from 2018 to 2020, Nghe An will conduct equitization and divestment of State capital at 4 enterprises.
Up to this point, Nghe An Tea Investment and Development Company Limited has approved the equitization plan and 3 units, Nghe An Coffee - Rubber Company Limited, Nam Cam Industrial Park Investment Company and Nghe An Newspaper Printing Company, are in the first stage of establishing the equitization plan.
CPH progress is still slow
Through discussion and research, it is shown that the equitization progress in Nghe An is still slow. Nghe An Tea Investment and Development Company Limited is an enterprise in which the State holds 100%. According to the assessment in the equitization plan, as of December 31, 2017, the actual value of this enterprise is 78.78 billion VND; in recent years, due to production difficulties and shrinking market share, the request for equitization has been urgent.
According to Mr. Hoang Trong Ky - Department of Organization and Personnel, Department of Agriculture and Rural Development: Due to the increasingly declining production, since 2015, the equitization plan at Nghe An Tea Investment and Development Company Limited was proposed and initially was to divest 100% of capital.
However, during the planning process, there were many problems related to land at the affiliated enterprises, so it was not until early August 2019 that the equitization plan of this enterprise was approved by the Provincial People's Committee; accordingly, the State will divest and only hold a minimum of 51% of the capital in the enterprise. Currently, we are waiting for the Provincial Party Committee's Standing Committee to give their opinions before officially finalizing the plan and announcing it.
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| Tea growers in Tan Lap village, Bong Khe commune (Con Cuong) harvest tea. Photo: Ba Hau |
Regarding Nghe An Coffee - Rubber Company Limited, although the initial goal was to equitize at the same time as Nghe An Tea Investment and Development Company Limited, due to many problems related to land disputes and complaints between the Company and local people during the previous contract assignment process; the Company itself was not really active in the process of building documents, so the equitization progress was delayed.
Up to this point, the Department has just approved the equitization plan of Nghe An Tea Investment and Development Company Limited, while Nghe An Coffee - Rubber Company Limited must be abandoned.
In addition to the two units under the Department of Agriculture and Rural Development, according to the representative of the Department of Finance, in 2018 and 2019, the province is focusing on directing Nam Cam Industrial Park Development Investment Company and Nghe An Newspaper Printing Company to develop a equitization plan.
However, due to difficulties in pricing and labor arrangement, the two units have not yet developed a plan.
Ownership conversion, mergers, equitization... are inevitable trends in the market mechanism, other types of enterprises are born, flexible management models should put state-owned enterprises that lack flexibility under increasingly fierce competitive pressure. If state-owned enterprises do not innovate, the longer they wait, the more they will lose money, and the more the state capital will decrease.
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| Production line at Nghe An Newspaper Printing Company. Photo: Thanh Cuong |
Removing "entanglements" that arise
Mr. Phan Ngoc Chau - Head of Corporate Finance Department, Department of Finance said: According to the roadmap, from 2018 - 2020, out of 4 equitized enterprises, there are 2 units in the agricultural sector, namely Nghe An Tea Investment and Development Company Limited, Nghe An Coffee - Rubber Company Limited, with the plan submitted by the Department of Agriculture and Rural Development; the remaining 2 units are Nam Cam Industrial Park Investment and Development Company and Nghe An Newspaper Printing Company, with the Department of Finance advising, and are directing these 2 units to do so.
However, the process of making a plan for each CPH enterprise has its own difficulties in asset assessment, the labor rearrangement plan requires a large amount of money, so it must be done carefully, in accordance with the interests of all parties, and considered to gradually resolve.
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| Infrastructure of Nam Cam Industrial Park has been basically invested but currently the Company is still not allowed to collect land rent from enterprises. Photo: Nguyen Hai |
In the near future, the Provincial Party Committee will give its opinion on the equitization plan of Nghe An Tea Investment and Development Company Limited, and at the same time ask for opinions on the equitization plan of Nghe An Coffee - Rubber Company Limited. Basically, the equitization plan, after being approved by the Provincial People's Committee and the Provincial Party Committee, will move to the next step of auctioning assets and selecting strategic investors to participate in the investment. However, with the plan that the State still holds less than 51% of the controlling shares, it will be very difficult for strategic investors and the difficulties of enterprises after equitization to be resolved.
It is known that compared to before, the State's regulations on equitization and divestment of state capital are increasingly stricter. According to the provisions of Decree No. 126/2017 of the Government issued on November 16, 2017, there are regulations on asset valuation.
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| Nghe An Book Distribution Joint Stock Company, which is subject to state capital divestment, owns a prime land plot in Vinh City. Photo: Nguyen Hai |
Based on the set goals, from now until 2020, the province will continue to direct the acceleration of equitization and state capital divestment. Currently, the equitization of enterprises in the province is mainly related to the agricultural sector, so the process of arrangement and settlement of land-related issues should be slower.
The province's guiding spirit is to speed up the progress but work closely to avoid loss of state assets. In the process of reviewing the equitization plan, priority is given to strategic investors, with capacity, inheritance and building investment plans, in-depth linkages, and product chains so that after equitization, the unit operates more stably and effectively, ensuring jobs for the majority of workers - said Mr. Nguyen Dinh Duc - Economic Head of Nghe An Provincial People's Committee.
