The equitization process has brought positive results to corporate governance in enterprises. Photo: ST

Surplus VND 8,254 billion through equitization

According to the report of the State Capital Management Committee, in 2022, the total revenue is estimated at VND 1,123,334 billion, equal to 114% of the plan and up 33% compared to 2021, except for EVN, which has a sudden loss due to the objective reason. The total pre-tax profit of 18 groups and corporations was estimated at VND 39,219 billion, equaling 173% of the plan and increasing by 17% compared to the previous year. 15/19 groups and corporations completed and exceeded the revenue plan; 17/19 groups and corporations completed and exceeded the plan in terms of profit before tax; 16/19 groups and corporations have completed and exceeded the plan for payment to the state budget.

A number of groups and corporations have made great efforts, achieved many positive results, and exceeded the plan in many production and business targets compared to previous years, such as PetroVietnam (PVN), General Corporation Petrolimex (Petrolimex), Chemical Group (Vinachem), Coal and Mineral Group (TKV); and Expressway Trading and Investment Corporation (VEC).

Over the past years, the enterprises under the Committee have also actively rearranged, innovated, restructured, equitized and divested state capital. According to the State Capital Management Committee, in the period 2016-2020 and 2021 up to now, corporations have focused strongly on restructuring industries and main business fields, accelerating divestment of investment capital outside the industry, restructuring member units, products, markets, investment plans, human resources; strengthen innovation and modernize corporate governance; complete the entire management, control and internal audit apparatus.

Regarding the equitization and divestment, groups and corporations have completed shares in 14 enterprises (6 groups, corporations and 8 subsidiaries) with a total income value to the State of VND 23,003 billion (surplus VND 8,254 billion, 1.56 times the book value). In addition, 6 groups and corporations have been equitized, including Vietnam Forestry Corporation (Vinafor) equitized in 2016, earning VND 2,145 billion; Rubber Industry Group (VRG) was equitized in 2017, earning VND 1,204 billion; Southern Food Corporation (Vinafood 2) was equitized in 2017, earning VND 2,335 billion; Vietnam Maritime Corporation (VIMC) was equitized in 2018, earning VND 62.2 billion; Power Generation Corporation 3 (GENCO 3) was equitized in 2018, earning nearly VND 201 billion; Power Generation Corporation 2 (GENCO 2) equitized in 2020, earning VND 14.58 billion.

Along with that, 8 subsidiaries of groups and corporations under the State Capital Management Committee were also equitized, of which there were three PVN enterprises equitized in 2017, earning VND 16,521 billion; one enterprise of Tobacco Corporation (Vinataba) was equitized in 2017, earning VND two billion; State Capital Investment Corporation (SCIC) equitized one enterprise in 2019, earning VND 24 billion; TKV equitizes one enterprise in 2020, earning VND 12 billion; Northern Food Corporation (Vinafood 1) equitized two businesses in 2020, earning VND 32 billion. As a result, over the past years, the Capital Management Committee has directed the divestment of 254 enterprises with a total value of VND 35,112 billion, a surplus of VND 25,410 billion, more than 3.5 times the book value.

90% of enterprises have high production and business results after equitization

According to the assessment, the equitization process has brought positive results to the corporate governance of enterprises. The operation of enterprises after equitization is more efficient; 90% of enterprises have high production and business results, both charter capital and budget payment increase, and the average rate of return on equity is three years after equitization reached 15.4%, higher than the average 12.4% of the previous period. In addition, in equitized enterprises, the ownership role of employees - shareholders have been significantly enhanced, thereby improving the efficiency of production and business of enterprises, creating more jobs and increasing income for workers.

Mr Ho Sy Hung, Vice Chairman of the Committee for Management of State Capital at Enterprises, said that after equitization, production and business results have been improved, the management apparatus is more flexible and responsive, and the participation has improved. The diversity of non-state and foreign economic sectors has brought a "new breeze" to the strategic management activities of enterprises. Many financial problems have been resolved; at the same time, transparency in enterprises' production and business activities is increasingly enhanced.

According to the General Department (State Capital Management Committee), in general, since equitization, enterprises under the State Capital Management Committee have gradually grown. As a result, the executive apparatus is no longer as rigid as before, instead, it is flexible and sensitive to changes in the economic environment in general and in the environment of each industry in particular. Furthermore, regarding strategic management, some businesses have focused on investing more with a greater sense and foresight through planning short, medium and long-term strategies.

Not only has a new vision, but businesses have also worked hard to find and research to come up with strategies with content that are realistic, accurate and suitable to the business's circumstances as well as the economic context. Strategies that are forceful and impractical are completely eliminated. Regarding financial management, equitization has helped enterprises solve financial problems. Adjusting to increase the amount of equity and charter capital is no longer a difficult factor for enterprises. Besides, enterprises after equitization no longer have too many problems with loans and bad debts. Transparency and clarity in each enterprise's production and business activities are focused and, discussed and recommended at the annual shareholder meetings. As a result, enterprises showed more initiative in making financial decisions and financial management, boldly expanding their investment in many other categories and fields.