Vietnam: Analysts believe now is the right time for government to sell its stake in Sabeco

Analysts believe that now is the right time for the state to divest Sabeco shares because the shares are going for a good price, VietNamNet Bridge reported on August 10.

Sabeco will step up selling the State capital in this firm in 2017 as requested by the Government.

A representative of Sabeco, the largest brewer in Vietnam, said Sabeco has chosen a consultancy firm for the process.

Nguyen Hoang Hai, deputy chair of the Vietnam Association of Financial Investors (VAFI), commented that the state’s divestment would only partially depend on the consultant, as it is the sales method that will determine the success of the transaction.

Sabeco should implement equitization quickly to grab the opportunity to sell at high prices, he said. If the State remains undecided, it will lose billions of dollars.

"It is necessary to organize auctions and sell its stake soon,” Hai added.

“If the State wants to sell its stake at high prices, it should sell all the 90 percent stake once. The sale must be done in a transparent and open way which will attract the highest possible number of buyers,” he said.

Hai stressed the principle of transparency in selling the state’s stake, i.e. shares will be sold to those who pay the highest prices.

To ensure transparency, it would be better to make public the share auctions and allow investors interview the enterprise before they make decisions.

Hai repeatedly stressed that the state should sell the stake once to avoid loss of the state’s property.

In general, state agencies don’t want to sell immediately because Sabeco is so valuable. However, an analyst said if the Ministry of Industry and Trade (MOIT) sells in dribs and drabs, 10 percent each time, Sabeco won’t be able to attract strategic shareholders.

“Strategic investors always want an ownership ratio high enough for them to join the board of directors of enterprises. The small lots of shares won’t attract them,” he explained.

“They won’t inject money into enterprises if the state still holds the controlling stake,” he said.

Hai from VAFI estimated that the state would get several billion dollars if all of its stake was sold at one time. The amount of money will be useful, because the state lacks sufficient money for development and investment.

Institutional investors from Australia, Japan and the US have shown great interest in Sabeco.

10 August, 2017