VNPT weighs up divestiture plans

According to VNPT’s deputy general director Phan Hoang Duc, state groups and corporations’ divestiture from non-core businesses was a necessity but should be handled with discretion.

Duc said VNPT was submitting a plan to divest VND2 trillion ($95.2 million) from non-core investments following the principle that pumped further money into areas entailing good returns and restructuring areas which are less effective.

VNPT reportedly pooled money into 85 joint stock and limited liability companies operating in diverse fields of posts and telecoms, multimedia communications and advertising, banking, finance, real estate, design and construction and tourism.

Total revenue of businesses having a VNPT stake came to around VND7.3 trillion ($476.2 million) in 2010, surging 13.5 per cent against 2009. The figure, however, was less than one-sixth of MobiFone’s 2010 revenue of VND36 trillion ($1.71 billion).

MobiFone is a VNPT wholly-owned telco.

In August 2011, VNPT attempted to divest from Maritime Bank via auctioning its right to buy the bank’s 25 million shares. However, the deal failed since no investor wanted to procure the right on the back of a flat stock market. VNPT is Maritime Bank’s second largest shareholder owning 12.5 per cent of the latter’s chartered capital tantamount to over 62.6 million shares.

Unlike Maritime Bank’s dropped divestment, recently the largest state telco succeeded in partially divesting from multimedia firm VMG Media JSC where its stake dropped from 36 to 29 per cent. In the meantime, it reduced capital contributions in Saigon Postel from 14.4 per cent to present 11 per cent.

“Generally, VNPT’s investment into outside areas is safe,” said Duc, adding that the group was considering hooking into a property development in central Nghe An province with $53 million investment.

The government reportedly gave one year deadline for the VNPT to complete its divestiture plans but “as divestitures also mean business restructuring, therefore it may take around five years but not one year for the group to achieve the goal,” said Duc.