Electricity of Vietnam (EVN) was urged to take drastic measures to advance the public auction of its shares to raise capital and become a key player in the national economy, the government cabinet leader said.
Deputy Prime Minister Nguyen Sinh Hung gave orientation to EVN at a conference Friday to review the group’s operations during 2006 and also discuss plans upcoming time.
Hung directed the state utility to focus on share sales in both its affiliates and electricity projects.
EVN could call on investment inflows from domestic investment organizations and individuals into its power development projects in Vietnam, Laos or Cambodia.
It’s suggested that the group’s electricity distribution projects to hospital and schools should also go public.
The Deputy PM emphasized that the intensive process to go public would be an effective way for the group to create a healthy and abundant financial source.
To establish a competitive electricity market in the future, he stressed EVN should continue to speed up share sales in its subsidiaries, and create favourable conditions for all economic sectors to engage in the electricity market.
With the new operating model, the EVN Group has the latitude to expand into telecommunications, mechanical engineering, tourism and real estate.
The past year of 2006 was a difficult one for EVN, working against dramatically lower water levels in hydro power plant reservoirs.
The group still managed to proved total electricity output of nearly 59 billion kWh during the last year despite of harsh weather conditions, ensuring power security for the national economy.
Pham Le Thanh general director of EVN said several shortcomings plagued the group during the previous year, including the substantial loss of power, drawn-out disbursement in infrastructure development projects and ineffective power saving programs.
These would be big challenges for EVN this year.
The group had priced 1 trillion VND (62mio US$) in bonds to yield 9.70%, by late last year.
The proceeds of the 10-year issue, the utility’s eighth offer last year, would be used for the construction of power plants.
The bonds, carrying a coupon rate of 9.70%, were priced at par to yield 9.70%. They will mature on Dec. 19, 2016.
The latest offer took EVN's bond sales last year to 6 trillion VND (375mio US$), all on the domestic market.
Goals
EVN has so far seen 21 of its affiliates go public, with all operating efficiently. Several of them have their shares listed on the nation’s stock exchanges.
The group is in the process of transforming an additional 19 affiliates into shareholding companies, striving to do so by 2008, save for its power transmission units.
EVN plans to sell its holdings in Ninh Binh, Thac Mo and Ba Ria power plants on Hanoi and Ho Chi Minh City Securities Trading Centers in the first quarter this year.
It looks set to become the country's first issuer of overseas corporate bonds Thursday, as state media reported it had sought permission to sell 150mio US$ worth.
The bonds would be sold on international markets to raise funds for power plants.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam, has submitted plans of the bond issue to the Finance Ministry for approval.
It has set targets of generating approximately 97 billion kWh by 2010 to meet an annual growth rate of 15-17%, and supplying electricity to 95% of rural households.
Source: Thanh Nien
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