Vietnam to divest from dairy giant Vinamilk in privatization push

By Thanh Thanh Lan   September 14, 2016 | 03:00 pm PT
Vietnam to divest from dairy giant Vinamilk in privatization push
Vinamilk products are displayed for sale at a Vinamilk shop in Hanoi. Photo by Reuters
The government also confirms plans to sell shares in nine other leading enterprises.

Vietnam's government will divest its shares in Vietnam Dairy Products JSC, or Vinamilk, one of the country’s most sought-after equities, later this year, a senior official confirmed on Wednesday.

Dang Quyet Tien, deputy director of the Finance Ministry’s Department of Business Finance, told a press briefing that the state ownership in Vinamilk is huge, valued at around VND100 trillion ($4.43 billion).

The government may choose to sell the shares gradually over the time in portions that can be easily absorbed by the market, he said, assuring that the sales will be “transparent.”

Foreign investors have long been interested in Vinamilk thanks to its strong prospects and expansion plans.

Vinamilk's stock has grown 18 times since the company was first listed in 2006, to VND146,000 ($6.54) as of mid-May, according to a Reuters report.

In October last year, the sovereignty wealth fund State Capital Investment Corporation unveiled plans to sell the state holdings in 10 leading state-run enterprises, including Vinamilk, which could garner almost $4 billion, according to the Vietnam News Agency.

The state ownership in the remaining nine state-run companies is scheduled to be divested in early 2017, the finance official said.

In late June, the board of directors of the Vietnamese dairy firm formally approved the removal of its 49-percent foreign ownership cap, paving the way for an expected surge of interest from overseas investors in the local company.

The government currently holds 45.1 percent stake in Vinamilk. The largest foreign shareholder in the Vietnamese company at present is F&N Dairy Investment, part of the Fraser and Neave conglomerate, with 11 percent. The firm is controlled by Thai beer tycoon Charoen Sirivadhanabhakdi, who has been making inroads into Vietnam via his conglomerate Thai Charoen Corp.

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