Focus on selecting partners for equitization and business arrangement

(Baonghean) - Implementing the Party and State's policy on restructuring and reforming state-owned enterprises (SOEs), Nghe An is equitizing water supply enterprises and divesting capital from a number of equitized enterprises that do not require the State to hold controlling shares. For forestry enterprises, the State still holds 100% of the capital.

Define the plan clearly

Based on the proposal of the People's Committee of Nghe An province, the Prime Minister issued Official Dispatch No. 321/TTg - DMDN (2016) on the overall plan to reorganize and innovate agricultural and forestry companies under the People's Committee of the province. Accordingly, the State-owned LLC holding 100% of charter capital will be maintained, consolidated, developed and restructured to perform the task of producing and supplying public products and services for the following companies: Song Hieu Industrial Forestry LLC; Tuong Duong Industrial Forestry LLC; Con Cuong Industrial Forestry LLC; Do Luong Industrial Forestry LLC. Equitization of Nghe An Tea Development Investment LLC; Nghe An Coffee Rubber LLC; 3/2 Industrial Agriculture LLC.

Orange garden of 3/2 Agricultural Industry Company Limited.

Implement the original contribution of assets, finance, labor, and land (after review) to establish a limited liability company with two or more members for 1/5 Agricultural LLC; Xuan Thanh Agricultural LLC; An Ngai Agricultural LLC. Convert into a protective forest management board operating under the mechanism of a public service unit with revenue and merge with the Quynh Luu Protective Forest Management Board for Quynh Luu Forestry LLC.

To increase land efficiency and ensure the efficiency of the main business lines, the Prime Minister requires that the main production and business lines of LLCs with two or more members only focus on agricultural production associated with the application of high technology, processing and consumption of products; and not to convert land use purposes.

Regarding this issue, Mr. Hoang Nghia Hieu - Director of the Department of Agriculture and Rural Development said: Nghe An is one of the localities that quickly reorganize and innovate state-owned enterprises. For the agricultural sector, in the first and second quarters of 2017, we will reorganize Song Con Agricultural Company, merging with the Quynh Luu Forestry Protection Management Board for Quynh Luu Forestry One Member Co., Ltd. Meanwhile, the Rubber and Coffee Joint Stock Company and Nghe An Tea Development Investment Company will review land and assets.

Accelerate state capital divestment

Currently, Nghe An has 10 state-owned joint stock companies that are allowed by the Government to leave the People's Committee of Nghe An province as the representative owner of state capital in the enterprise. Based on the criteria for classifying enterprises according to Decision No. 37/2014/QD-TTg dated June 28, 2014 of the Prime Minister on promulgating criteria for classifying state-owned enterprises, Nghe An has 6 remaining enterprises that the state does not need to hold shares. The Provincial People's Committee has decided to sell all state capital in these enterprises. These are the companies: Nghe An Aquaculture Seed Joint Stock Company, Nghe An Plant Seed Joint Stock Company, Nghe An Plant Protection Service Joint Stock Company, Nghe An Trading Joint Stock Company, Mountainous Development Investment Trading Joint Stock Company, Nghe An Irrigation Construction and Installation Mechanical Joint Stock Company. The Provincial People's Committee has approved the plan to divest state capital in 6 companies.

Operating the water supply system at Cua Lo Town Water Supply Company Limited. Photo: PV

Up to now, the divestment has been completed in 4 enterprises, namely: Nghe An Trading Joint Stock Company, Plant Protection Services Joint Stock Company, Mountainous Development Investment Joint Stock Company, and Irrigation Engineering Joint Stock Company. The remaining 2 enterprises that have not yet divested all their capital are: Plant Seed Joint Stock Company, Aquaculture Seed Joint Stock Company.

It can be seen that after equitization, many enterprises still have difficulties in production and business, some are still confused about production and business strategies, so it is necessary to continue divesting state capital. Mr. Truong Van Hien - a strategic investor who is currently investing in buying 96% of capital in Nghe An Seed Joint Stock Company said: After buying state shares in the unit, I received all the company's labor and assets in their original state, rearranged the human resources and transferred the entire apparatus of the Seed Joint Stock Company to the headquarters of the Agricultural Materials Joint Stock Corporation to work. Currently, I have increased the charter capital of this company to 50 billion VND and the company is reorganizing production and business, initially the employees are very active in working. There is still 820 million VND of state capital here that has not been sold out.

Mr. Phan Ngoc Chau - Head of the Department of Corporate Finance, Department of Finance said that the state's charter capital in the above enterprises has basically been divested, ensuring the floor price. The arrangement and equitization of state-owned enterprises is on the right track and the capital source is socialized, increasing the initiative of enterprises. Some enterprises after equitization operate effectively such as the Agricultural Materials Corporation, Traffic Construction Corporation 4... The capital obtained from divesting capital of Nghe An enterprises is being proposed by the Central Government to be left to the locality.

Continue equitization of State-owned enterprises

To implement the equitization plan for the 2011-2015 period according to the project approved by the Government, in 2014, the People's Committee of Nghe An province issued a decision to equitize 6 LLCs in the form of the state holding more than 51% of the charter capital. Including the following units: Thai Hoa Water Supply LLC, Dien Chau Water Supply LLC, Quynh Luu Water Supply LLC; Cua Lo Water Supply LLC; Nghe An Urban Environment LLC and Nghe An Water Supply LLC. Up to now, 5 units have completed the equitization and held their first General Meeting of Shareholders, while Nghe An Water Supply LLC is preparing for its first General Meeting of Shareholders.

Mr. Phan Ngoc Chau added: All 6 enterprises above have 51% of charter capital held by the State, the selling rate is 49%. The total charter capital of all 6 enterprises is 445,374 million VND; of which the State holds 51% of capital: 227,141 million VND, sold to strategic shareholders, incentives for employees and other shareholders: 218,233 million VND. Urban water supply and environmental enterprises must ensure business tasks, and perform social security and environmental sanitation tasks in the city and province (through clean water prices regulated by the Provincial People's Committee). The low profitability makes it difficult to attract investors when selling shares to the outside.

The province will carry out the equitization of 3 enterprises, including: Nghe An Tea Investment and Development Company Limited; Nghe An Rubber Coffee Company Limited and 3/2 Agricultural Industry Company Limited. Currently, the enterprise is reviewing land allocation contracts, determining the unused land area to transfer to local management.

Chau Lan