Restructuring: Does it really happen? For years, the word "restructuring" has become so familiar to many people, but not many people have seen the results of restructuring. Experts say that they have just heard about restructuring, not seen it. Slow restructuring, the risk of capital loss    Dr. Le Dang Doanh says that to restructure SOEs, the state should have public and transparent rules for the operation of SOEs. According to the latest report by the Government, the restructuring plans for 68 state corporations and groups have been approved. In particular, the Prime Minister approved 19 projects; ministries approved 39 projects, and provincial governments ratified 10 projects. By the end of August 2013, the Government approved 100/101 plans to restructure and renovate state-owned enterprises, submitted by ministries and localities. If one looks at the above numbers, he may see that the restructuring has been implemented simultaneously at all levels. However, the restructuring process is admitted to be very slow by the government. In another aspect, the slow restructuring of state-owned enterprises (SOEs) is causing great losses to businesses and the economy. This is quite clear in the 2012 audit report for the fiscal year 2011, released by the State Audit of Vietnam Agency a few months ago. The report stated that of VND25.75 trillion of financial investment by state corporations and groups, many investment projects were unprofitable or reduced in value and high risk of capital loss. Experts say that the implementation of the restructuring of state-owned corporations and groups is very rewarding. However, the simultaneous implementation of restructuring cannot bring about efficiency, when resources are being depleted. At the same time, unreasonable provisions on restructuring, such as state groups must complete the withdrawal of capital from non-core business fields by 2015 and state groups must not sell their stakes in non-core business at lower level than the initial investment capital… have made state groups not to know whether to laugh or cry, since they are struggling to find a buyer. Disinvestment from non-core business fields of the Vietnam Oil and Gas Group (PetroVietnam) and the Electricity of Vietnam Group (EVN) is not easy. PetroVietnam Chair – Mr. Phung Dinh Thuc admitted that although the group’s restructuring scheme was approved by the Prime Minister, the withdrawal of capital from non-core business areas is now stuck due to economic crisis. Thuc says that the policy of PetroVietnam is to withdraw capital from the non-core business fields but this must be implemented under a certain roadmap. The biggest problem is finding a partner to make divestments in the fields of finance, banking, real estate ... This means that the total investments in the non-core business areas of PetroVietnam of VND5.8 trillion (of its total capital of VND304 trillion) continues to be "idle." At EVN, under the restructuring scheme of SOEs, from 2015, EVN must withdraw all investment capital in non-core fields. The divestment is also a big problem for EVN since this group was requested by the Ministry of Industry and Trade to not sell its stakes in non-core business fields at lower market value. This regulation raises difficulty for EVN in seeking an eligible partner to transfer its capital at ABBank, EVN Finance or EVN Land Central. Must be transparent Financial expert Bui Kien Thanh says that if Vietnam really wants to restructure state corporations and groups, the state should insist on asking these firms to divest from commercial banks and non-core business fields and to stop abusing the public goals to crush the private enterprises. Dr. Le Dang Doanh says that to restructure SOEs, the state should have public and transparent rules for the operation of SOEs. "Whenever SOEs keep hiding information and the cross-ownership of banks still exists, it is impossible to restructure SOEs. To restructure in a market economy, credit plays an extremely important role. When banks are sinking into bad debt, businesses do not have access to capital, it is hard to maintain the economy, let alone restructuring the economy," Doanh says. Source: Tien Phong