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Govt plans to sell shares in state enterprises
The government has stepped up its efforts to convert state-owned enterprises into public companies as it seeks the capital needed to build these strategic businesses.
The Ministry of Finance's State Enterprise Management Department last week teamed up with Lane Xang Securities Public Company to host a seminar for the management of state-owned enterprises about the workings of public companies and how they may be listed on the stock market.
The seminar is a first step by the government in selling some of its shares in these state enterprises to the private sector. It hopes the selling of shares will provide the capital needed to develop and expand strategic businesses without having to sacrifice its management of these companies.
Trading began on Laos' first Securities Exchange in January, with only two companies listed. Several other state enterprises have expressed interest in listing, but many of them do not know the processes involved in becoming a public company and listing on the market.
Speaking at the opening ceremony of the Equitisation and Listing of State Owned Enterprise Seminar held in Vientiane, Ministry of Finance Office Head Mr Sila Viengkeo said the presentation aimed to help state enterprises prepare themselves to become public companies and list on the Lao stock market.
He said the stock market played an important role in helping companies to mobilise investment funding. Such funding is one of the main driving forces of the economy, especially the growth and expansion of enterprises.
According to a report from the Ministry of Planning and Investment, Laos requires investment funding of US$1.6 billion a year to secure national GDP growth of at least eight percent over the next five years. About 50 to 60 percent of this funding is expected to come from the private sector.
Over the first six months of this fiscal year, the government has held talks with 17 state-owned enterprises to discuss the possibility of converting them into public companies, in which the government would hold a majority share.
The government is now developing a strategy and prime ministerial decree on the development of state enterprises and state-private joint ventures, hoping to strengthen these companies so they are better equipped to participate in the development of Laos.
The government is selling 25 percent of its EDL Generation shares to local and foreign investors, aiming to use the revenue earned to build power plants at the end of 2010. It has also sold 20 percent of its shares in the BCEL bank to local and private investors and plans to sell a further 10 percent to strategic business partners.
There are a number of possible candidates for conversion into public companies: Lao Airlines, Vientiane Water Supply Enterprise, and the telecom firm ETL. Privately owned and joint venture businesses including the Lao Brewery Company and Dao Heuang Group are also looking into the possibility of going public and listing on the Lao stock market.
The Lao Securities Exchange expects to list five more companies this year.
vientiane times
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