Privatization quickens as investors lay eyes on "golden land"

By May 12, 2016 | 05:19 am PT

A man walks by Prada shop in Hanoi. Photo by Tomas Slavicek

Vietnam has managed to privatize, both partially and wholly, 34 state-owned enterprises (SOEs) during the first four months of this year, according to a report by the Steering Committee of Business Development and Reform.

Investors have recently become more interested in buying stakes in these companies mainly because they have long-term leases on “golden land plots” in some of the most sought-after locations in Hanoi.

The country has set up working teams to privatize 60 more SOEs and carried out the valuation of assets to be privatized in 79 more, said the report.

Military-run Viettel, one of the country’s leading telecos, state investment arm SCIC and top rice exporter Vinafood 1 have divested their state-owned stakes in many companies and corporations in the past four months. Their divestments have contributed VND2.3 trillion ($101 million) to the state budget.

The report also said that the recent push for privatization has been successful because the pricing of assets to be transferred from the public sector to the private sector is higher than their book value. For instance, SCIC has sold a 52.4 percent stake in Kim Lien tourism company which owns 3.5 hectares of land in the center of Hanoi. The deal was worth more than VND1 trillion ($45 million).