The equitization process has been completed and supplemented in the direction of creating clearer and more open conditions for SOEs to conduct equitization. However, in practice, the implementation of the above documents still has problems that have not been completely resolved. For example, the policy on strategic shareholders still creates a gap between domestic and foreign investors, and has not created conditions to attract and connect the investment activities of strategic investors with the development of equitized enterprises. The mechanism for selling shares is not suitable for large-scale joint stock enterprises such as cement factories, power plants, etc. There are no regulations allowing strategic investors to buy large lots of shares sold at a joint stock company to participate in the management and operation of the enterprise after equitization. There is no mechanism to monitor and create a connection between the responsibilities and interests of intermediary organizations and the results of the auction of shares. Some intermediary organizations have not yet evaluated the equitization of enterprises in a realistic manner, leading to the equitization steering committees having to request explanations and revisions many times, prolonging the equitization period.
The problem of policy mechanism appeared right from the time of equitization and
dS has been gradually overcome. However, at present, the entanglement in policy mechanisms is still quite evident when equitizing large corporations - the subject that will be strongly implemented in the coming years.
- Third, determining enterprise value still has many shortcomings leading to
In addition to inaccurate calculations, the closed equitization situation in previous years also left significant consequences after equitization. This is clearly shown in the determination of land use rights value in equitized enterprises without specific guidance in documents guiding the implementation of the Land Law, especially the applicable price, procedures, etc. In reality, most units choose the form of land lease, not the form of land allocation because the land lease price issued by localities is not close to the market price or has not been adjusted in time to market fluctuations; if land allocation is implemented, it must be calculated.
The value of land use rights in enterprise value, increasing the scale of State capital in the equitized unit too much affects the production and business efficiency of enterprises after equitization and is not attractive to investors. In fact, the determination of
Inaccurate determination in enterprise valuation is not only caused by unclear regulations on calculating the value of land use rights but also manifested in regulations on the role and responsibilities of the Valuation Council and the method of issuing shares. The Valuation Council is organized by officials of many agencies, so it is not professional, so the accuracy of the valuation is not high. Moreover, the number of shares sold is too small and there is no mandatory auction, so the real value of the enterprise cannot be determined. There are many examples of not valuing land or valuing too low, causing damage to state assets during the equitization process, such as the valuation of Phu Gia Hotel; examples of closed equitized enterprises that reduce the effect of equitization, such as the case of Binh Minh Plastic Company with a charter capital of 107.18 billion VND, the state holds 64.6% of shares; Thanh Hoa Beer Company, state-owned shares hold 83.3%, Southern Battery Company, state-owned shares hold up to 90.15%, Rang Dong Light Bulb and Thermos Company 91.91%.
- Fourth, there are difficulties in implementing the equitization of state-owned enterprises. Equitization is an important task of state management agencies, but in reality, this work is still carried out by concurrent officials, although an Equitization Steering Committee has been established. Low specialization in state management has led to ineffective supervision, inspection and assistance to enterprises in equitization.
On the part of enterprises, they have to take care of two major tasks at the same time: maintaining normal production and business activities, and carrying out tasks related to equitization. Therefore, it is difficult for the implementation work to take place with good results. In addition, the work of the equitization process is extremely complicated due to the procedures.
cumbersome procedures also slow down the equitization progress.
The above problems and causes in the equitization of SOEs are not new but have appeared many years ago, but have not been resolved promptly. The delay in resolving these problems has created a chain reaction in the equitization process of SOEs in particular and the innovation and development of SOEs in general.
2.2.1.2. Overview of the equitization situation of state-owned enterprises in the transport sector
- Pilot phase of equitization of state-owned enterprises (May 1992-April 1996)
SOEs in the transport sector were initially not among the SOEs selected by the Chairman of the Council of Ministers (now the Prime Minister) under Decision 203 CT dated June 8, 1992 to direct the pilot transformation into joint stock companies. However, the transport sector was one of the first five SOEs to be equitized after 3 years of implementation - the United Transport Agency Company. This is a business company with a fairly high profit margin, operating in the service sector of the transport sector, headquartered in Ho Chi Minh City. The implementation of equitization was carried out in the following steps:
Establish an Equitization Council and develop a detailed plan to convert to a joint stock company.
Activities of the Equitization Council after developing the project: Disseminate the enterprise equitization plan; request officers and employees in the company and in the industry to register to buy shares for the first time to preliminarily determine the feasibility of the project.
After completing the pilot work, the company plans to issue new shares to sell to other companies or to foreign individuals to raise more capital. The valuation of the company's assets is carried out by the Ministry of Finance, the Ministry of Transport and the Vietnam Auditing Company, with a value of VND 6,257.5 million. The company will issue registered and transferable shares, worth VND 200,000/share. The Board of Directors
The state-owned shares account for 20% of the total shares; 40% are sold to employees in the enterprise, and 40% are sold to individuals outside the enterprise. The minimum limit for an individual is 10 shares (equivalent to 2 million VND), the maximum limit is 5% of the total shares issued to individuals (equivalent to 25 million VND). Shares are sold in the following order of priority: employees in the company; employees of Gemartrans (a company with loans); employees of the General Department of Maritime Affairs and the Maritime Development Corporation; employees in the transport sector.
Results: The first round of share registration was quite crowded, the company sold 80% of the total shares. However, the remaining shares in the second round of registration took nearly 2 months to sell out. The number of shares held by members changed compared to the plan, out of the total 31,038 shares, the state held 18.0% (expected 20%), the company's staff held 33.1% (lower than the regulation - 40%), and outsiders held 48.9% (higher than the regulation - 40%). In July 1993, the company decided to convert to a joint stock company.
Thus, the pilot equitization of the Transport sector went quite smoothly. That result can be assessed due to the following main reasons:
+ First of all, the reason lies in the selection of a state-owned enterprise as a pilot unit for equitization. As presented above, the United Transport Agency Company is a business company with a fairly high profit margin. Therefore, the attractiveness of equitization is large. That attractiveness will overwhelm the concerns of investors, especially investors outside the enterprise, about a completely new policy - equitization of state-owned enterprises at that time.
+ Second, the work of implementing the pilot equitization is very meticulous and careful, from developing the project to determining the feasibility of the project through organizing the first share purchase registration.
+ Third, dS reasonably determines the subjects and priority levels in buying shares. Therefore, dS mobilizes the participation of a large number of subjects buying shares.
Voters are people in the business and in the industry, creating confidence for people outside the industry to participate in buying shares.
- The period of expanding equitization of state-owned enterprises (May 1996 - June 1998)
Entering phase 2 - the phase of expanding equitization, the transport sector had 5 SOEs equitized, of which 3 were implemented in 1996 and 2 were implemented in early 1998.
Of the 5 equitized SOEs, only Dong Giao Stone Exploitation Company is under the management of the Ministry of Transport, the rest are SOEs of the industry but managed by the provinces (2 of Hai Phong, 1 of Hai Duong and 1 of Binh Duong).
Although it is a stage of expanding the equitization of state-owned enterprises, like the equitization process of state-owned enterprises in general, the equitization of state-owned enterprises in the transport sector is taking place slower than planned. The reasons for the slow equitization of the transport sector are not outside the common reasons for the equitization of state-owned enterprises nationwide, in which the slow promotion of the role of state-owned enterprises due to the short time is one of the main reasons. However, compared to the general speed of the whole country, the result of 5/25 state-owned enterprises being equitized is a great effort of the transport sector in the equitization process of state-owned enterprises when compared to the equitization process of state-owned enterprises in other sectors.
Table 2.1 . Equitization situation of State-owned enterprises in the transport sector in the period 1996-1998
Company
Date of change of form | round Charter (million VND) | State capital ratio (%) | Capital ratio of CB, CN (%) | Percentage of external equity | |
Dong Giao Stone Exploitation Company | September 1, 1996 | 3,200.0 | 49.8 | 30.7 | 19.5 |
Hai Phong Passenger Transport Company | September 1, 1996 | 1,826.0 | 30.0 | 70.0 | 0.0 |
Binh Dinh Shipyard | July 1, 1996 | 1,150.0 | 51.0 | 19.0 | 30.0 |
Hai Duong Water Transport Company | 1/1/1998 | 2,863.0 | 45.7 | 54.3 | 0.0 |
Hai Au Hai Phong Company | June 1, 1998 | 1,282.0 | 15.0 | 57.9 | 27.7 |
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Source: Report on the implementation of CPH in the transport sector - Ministry of Transport
- The period of accelerating equitization (from June 1998 - 2006)
The replacement of Decree 28 CP by Decree 44 CP dated June 29, 1998 is a condition to accelerate the equitization process of state-owned enterprises in general and the transport sector in particular. From June 1998 to 2006, the transport sector has equitized 167 state-owned enterprises or member units of state-owned enterprises, bringing the total number of state-owned enterprises and member units of the sector to 167.
173 enterprises were equitized. Specifically:
- 6/1998 - 12/1998 Equitized 1 state-owned enterprise and 2 state-owned enterprise divisions.
- In 1999, the Ministry of Transport successfully transformed 19 state-owned enterprises or member units into joint stock companies.
- In 2000, the Transport sector equitized 17 state-owned enterprises or member units of state-owned enterprises.
- In 2001, 3 state-owned enterprises and 2 state-owned enterprise divisions were equitized.
- In 2002, the Transport sector equitized 6 state-owned enterprises of the sector.
- In 2003, 30 units were approved to convert into Joint Stock Companies. Among them, there were 11 Traffic Construction Companies, which were member units of Traffic Construction Corporations; 6 enterprises engaged in automobile and ship transportation, 6 enterprises engaged in service functions; the rest were mechanical and cement production enterprises.
building and repairing watercraft.
- In 2004, the Transport sector decided to convert 77 State-owned enterprises and member units of the Corporations into joint stock companies.
Table 2.2. Equitization situation of State-owned enterprises in the transport sector in the period 1999-2005
Target
Unit | 6/98-99 | 2000 | 2001 | 2002 | 2003 | 2004 | |
1. Number of equitized enterprises | DN | 21 | 17 | 5 | 6 | 31 | 76 |
2. Average time of equitization | Day | 68 | 139 | 114 | 125 | 111 | 105 |
3. State capital before equitization | billion | 45,034 | 99,206 | 44,,850 | 75,014 | 1,581.30 0 | 5,814,200 |
4. Charter capital | Ratio | 75,401 | 153,849 | 107,180 | 108,873 | 2,259.28 | 8,306,241 |
5. State capital after equitization
% | 32.0 | 44.0 | 47.0 | 42.0 | 46.26 | 52.2 | |
6. Labor capital ratio of the enterprise | “ | 34.0 | 41.0 | 32.0 | 43.0 | 38.2 | 22.6 |
7. Human capital ratio outside D. industry | “ | 34.0 | 15.0 | 21.0 | 15.0 | 15.54 | 25.2 |
8. Enterprise labor after equitization | People | 1,263 | 3,007 | 1890 | 1900 | 7,750 | 19,000 |
Note: Calculated from the date of decision to convert into a Joint Stock Company
- In 2005, the sector continued to transfer enterprises according to the 2004 decision and implemented the goal of "Strive to basically complete the equitization of state-owned enterprises under the Ministry by the end of 2005 in accordance with the spirit of Resolution 3 of the 9th Central Committee". According to the plan approved by the Government, the Ministry will equitize 75 state-owned enterprises, but the Ministry has only equitized 100 enterprises, including: 14 enterprises under the 91 Corporations and 86 enterprises under the Ministry, specialized Departments and under the 90 Corporations (67 independent state-owned enterprises and 19 business divisions).
Table 2.3. Equitization situation of State-owned enterprises in the transport sector (up to December 2005)
TT
Unit name | Count | Equitized | Remaining | |
1 | State-owned enterprises under the Ministry of Transport | 538 | 267 | 271 |
2 | In which: Enterprises under Corporation 91 | 202 | 97 | 105 |
3 | In which: Enterprises under Corporation 90 | 237 | 127 | 110 |
4 | In which: Enterprises under Ministries and Departments majors and schools | 99 | 43 | 56 |
Source: Report on the work of arranging, innovating and developing state-owned enterprises at the Ministry of Transport's Business Conference - September 2006
- In 2006, in the first 9 months of the year, the Ministry of Transport equitized 15 enterprises. Including: Transport and Ship Chartering Company (Vietfracht), Construction Enterprise under the Waterway Construction Corporation, Construction Enterprise 2 under the Waterway Construction Corporation, Mechanical Construction Company under the Road Construction Corporation.
Waterway Construction Investment and Trading Company under the Waterway Construction Corporation, Motorcycle Manufacturing and Trading Company under the Vietnam Automobile Industry Corporation, Transport Equipment and Trading Company under the Vietnam Automobile Industry Corporation, Waterway Construction Company under the Vietnam Waterway Construction Corporation 1, Road and Bridge Company 10 under the Vietnam Road and Bridge Corporation 1, Construction Materials Production and Trading Company No. 2 under the Vietnam Road and Bridge Corporation 1, Bridge Company 14 under the Vietnam Road and Bridge Corporation 1, Investment and Construction Trading Company 424 under the Vietnam Road and Bridge Corporation 4, Transport Equipment and Trading Company 675 under the Vietnam Road and Bridge Corporation 6, Branch of the Transport Investment and Import-Export Company in Da Nang.
Thus, the period of accelerating the equitization of state-owned enterprises (June 1998 - 2006),
As its name suggests, the period of equitization of state-owned enterprises in general, and the transport sector in particular, has undergone a qualitative change. It is a process of a sudden increase in the number of equitized state-owned enterprises (in the period 2001-2006 alone, 234/253 state-owned enterprises were equitized). Many corporations have completed and exceeded the equitization of state-owned enterprises such as: Southern Inland Waterways Corporation (successfully converted 100% of its affiliated units into joint stock companies since 2003), Vietnam National Shipping Lines Corporation, Inland Waterways Transport and Unloading Company, under the Vietnam Inland Waterways Administration. Some units have completed quite well such as: Vietnam Railway Corporation, Transport Construction Corporation 4, Transport Construction Corporation 6, Transport and Ship Chartering Company. Besides, there are still units that are slow in progress and need to be accelerated in 2005-2006 such as: Vietnam Airlines Corporation, Traffic Construction Corporation 5, Construction and Trading Corporation, Vietnam Shipbuilding Industry Corporation.
2.2.1.3. Evaluate the results and shortcomings of equitization of state-owned enterprises in the Vietnamese transport sector
* Results achieved:
- Equitization of state-owned enterprises in the Vietnamese transport sector has been carried out for nearly 15 years. This is a rather long implementation process. But