Vietnam government to sell $4.2 billion of shares in major firms

HANOI - The Vietnamese government will sell its stakes in companies ranging from a dairy giant to an insurance firm in a move worth up to US$3 billion (S$4.2 billion), state media said Wednesday, boosting the communist nation's privatisation drive.

Growth in the Southeast Asian country has been bucking the regional trend with GDP rising to 6.81 per cent in the third quarter, backed by strong exports and the service sector.

Vietnam is in the process of easing business regulations as part of its long-running privatisation drive and the newly-announced plans will remove its hold over several major companies.

On Wednesday Thanh Nien newspaper said the government would "obtain up to $3 billion by pulling out capital from 10 enterprises" including dairy giant Vinamilk, the leading Bao Minh Insurance Corporation and FPT Telecom.

The majority of this sum would come from Vinamilk -- the most successful dairy company in Vietnam -- according to the state-run publication, which cited a decision signed last week by Deputy Prime Minister Vu Van Ninh.

Senior economist Le Dang Doanh told AFP that the sales "will help accelerate the process of privatisation of public enterprises".

He added that the government plans to privatise up to 429 enterprises this year but appears to be running behind schedule.

Despite its racing economy, Vietnam remains dominated by huge and often sclerotic state-owned enterprises.

In a move to open up to overseas investments, Vietnam said in June it will end restrictions limiting foreigners from owning more than 49 per cent of locally-listed companies.

The timeline of the government's withdrawal from these 10 companies is not yet clear.

Vinamilk was valued at $5 billion last year with an annual growth of 22 per cent in 2014.