ADB to loan US$630 million to reform State-owned enterprises

Nhan Dan Online - The Asian Development Bank (ADB) and the Vietnamese Government signed a multi-tranche loan of US$630 million on September 27, to provide support for Vietnam to accelerate reforms of State-owned enterprises (SOEs).

Under the loan deal, from now until 2015, ADB will provide US$600 million from its ordinary capital resources to strengthen the balance sheets of selected corporations through debt restructuring, and US$30 million from its highly concessional Asian Development Fund to support improvements in their operations and corporate governance.

At the signing ceremony, Nguyen Van Giau, Governor of the State Bank of Vietnam said: “The transformation of SOEs started in 1992, aimed at increasing their efficiency and reducing the role of the State in their management. However, the process has been slow and confined mainly to smaller enterprises”.

He added that the Government is now planning to equitise and transform large state corporations to unlock their full potential and that of and their subsidiary companies. The ADB assistance will help several SOEs become more efficient, profitable and transparent with better corporate governance.

Ayumi Konishi, ADB Country Director for Vietnam, said that with this loan, the ADB hopes to help restructure Vietnam’s several general corporations to make them sub-groups of companies that can operate independently, secure financial resources from capital markets on their own without relying on the Government, and meet all the conditions for being listed on the stock market. Training and other assistance will also be provided for the Government agencies involved in the SOE reforms such as the Debt and Asset Trading Corporation.

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