Hanoi mulls a plan to offload the entire State-owned shares in 23 local companies until 2025.

A bus of the Hanoi Transport Corporation picks up passengers in Hanoi. Photo: Pham Cong/The Hanoi Times

The enterprises include shoe manufacturer Thuong Dinh Footwear Company, Hanoi Housing Development and Investment Corp (Handico), Urban Infrastructure Development Investment Corporation (UDIC), bicycle manufacturer Thong Nhat Hanoi JSC, consumer and service company Viet Ha JSC, Tran Phu Electric Mechanical JSC, and Hanoi Book JSC.

The city aims to sell all 30% stakes of the said companies in 2024 and complete its exit from the rest in 2025.

Under the plan, the capital's authorities will reduce State ownership from 100% to a maximum of 50% in Hanoi Investment Export Import and Construction Development Co. Ltd, and to 50-65% in Lighting and Urban Equipment Co. Ltd.

On the other hand, the city will nationalize Hanoi Movies Co. Ltd. The local government decides to keep the State's ownership in Son Tay Water Company, Market Operator Dong Xuan JSC, Hanoi Livestock Breeding JSC, and Hanoi Transport Project JSC unchanged. The state owns between 60.3% and 95.6% of these four companies.

Eighteen enterprises will remain in the form of limited liability companies, in which Government agencies hold 100% of the enterprises on behalf of the State, including Hanoitourist Corp, Hanoi Transport Corporation, Hanoi Metro, Hanoi Capital Construction Lottery Company, and Ho Guom Investment, Tourist and Im-Export Company.

Municipal authorities will submit to the Prime Minister the divestment plans for UDIC, Handico, electronics firm Hanel JSC, and Thang Long Metal Wares JSC.

The companies on the disinvestment and privatization list must resolve issues related to their finances and assets in 2023. They must seek instructions and solutions from the Ministry of Natural Resources and Environment on land issues.

According to the Ministry of Finance, no State enterprises were privatized in the first five months of the year. During this period, the State sold shares in five State-run enterprises, earning VND179.2 billion (US$7.63 million).

The ministry blames the slow pace of divestment on the volatility of domestic and international financial markets and the pandemic. In addition, many companies operate on a large scale, making it difficult to value their assets.

There are reports from the ministry that several State-owned enterprises have violated asset and capital management regulations and are under investigation. Meanwhile, some State-owned enterprises have failed to comply with their obligations voluntarily.

Many Government agencies have not paid much attention to restructuring the disinvestment plan for 2021-2025, while the targeted companies have not resolved the obstacles regarding their real estate, financial conditions, and public assets.