The proceeds were in line with the government's expectation.
Vietnam has raised VND664 billion (US$29.2 million) from the initial public offering (IPO) of its 93% stake in Vinasugar II.
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Vinasugar II now has a charter capital of VND685 billion (US$30.14 million). It is engaged in manufacturing sugar, starch, and packaging; providing technical services for sugarcane and consulting services, financial investment and commercial and real estate business.
The auction of the sugar producer was successful as opposed to its peer under the Ministry of Agriculture and Rural Development, Vietnam Rubber Group (VRG). The government raised VND1.31 trillion (US$57.7 million) from the rubber firm's IPO, far lower than its expectation of raising at least VND6.2 trillion (US$273.1 million).
In 2016, Vinasugar II's revenue stood at VND448.7 billion (US$19.7 million), while after-tax profit was VND29.9 billion (US$1.3 million). The company expects to have garnered VND462 billion (US$20.3 million) in revenues and nearly VND16.5 billion (US$7.26 million) in after-tax profits in 2017.
Sugar manufacturers in the country are worried due to the impending implementation of the ASEAN Trade in Goods Agreement (ATIGA) that will eliminate quotas and reduce tariffs on all sugar imported from other ASEAN countries.
In Vietnam, Thanh Thanh Cong Tay Ninh Sugarcane JSC (TTCS) has been a major brand in the production and supply of sugar for many years. Last November, Vietnam's largest dairy producer officially set foot in the sugar industry by purchasing a 65 per cent share in the Khanh Hoa Sugar Joint Stock Company, renaming it Viet Nam Sugar JSC (Vietsugar).
Total revenue from the equitization process and divestment in 2017 is estimated at VND144.6 trillion (US$6.3 billion), 2.4 times higher than the original target of VND60 trillion (US$2.6 billion) set by the National Assembly. Specifically, revenue from equitization process and divestment is VND5.2 trillion (US$229 million) and VND139.4 trillion (US$6.1 billion), respectively.
From 2016 to 2017, equitization schemes in 124 state-owned enterprises (SOEs) were approved with the actual value of state funds at VND185 trillion (US$8.1 billion). In 2017, state funds in SOEs subject to the equitization process were revalued at VND160 trillion (US$7 billion),or 6.34 times higher than the number in 2016.
