The equitisation of State Owned Enterprises (“SOE”) has been progressing at an uneven pace since the advent of Doi Moi in the late 1980’s. What initially looked like a potential bonanza turned into potential disappointment as the legal framework and a clear pathway to equitisation failed to materialize. Foreign participation has been marginal at best and only a few successful equitisations can be held up as examples of a successful process.
Still, if ever the Vietnamese saying “Từng bước, từng bước” (Step by step) applied to the changing face of business in Vietnam, it is to the equitisation process.
Since the early days of equitisation, the government has taken many steps to get to the point where it now plans to reduce its ownership in some of the country’s major SOEs. The October 2015 announcement by the State Capital Investment Corporation (“SCIC”) to sell the entire State capital held in ten major Vietnamese corporations should be seen as a large step forward.
As the government moves to further reduce its stake in enterprise, a unique situation exists to participate in what is shaping up to be significant investment opportunity.
Positioning a company to participate in an equitisation, either as a foreign strategic investor or significant stakeholder, is far from easy.
Serica helps guide companies through the complex equitisation process. We have an in-depth understanding of the equitisation procedures and act as a bridge between the foreign investor, target company and the government departments tasked with overseeing the equitisation.