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Vinacomin to divest from non-core business
The Viet Nam National Coal and Mineral Industries Group, or Vinacomin, has announced plans to withdraw capital from the Viet Nam Aviation Insurance Joint Stock Company (VNI) and officially set in motion plans to pull out from its non-core business this year.
Vinacomin's total investment in VNI is roughly VND50 billion (US$2.4 million) and the group's leaders said the auction to sell its share could take place next month.
Sources said the Ha Noi General Import and Export Company (Geleximco) and PetroVietnam Insurance Corporation had expressed interest in Vinacomin's shares. However, by law, the sale of such shares must be conducted at an auction, rather than through private negotiations.
VNI was established over three years ago with Vinacomin as one of its founding shareholders. Last year, VNI's total premium revenue reached VND484 billion ($23.3 million), ranking seventh out of the 29 non-life insurance companies in Viet Nam. Its net profit reached VND34 billion ($1.6 million).
This year, VNI has targeted to earn a total premium revenue of nearly VND493 billion ($23.7 million) and net profit of VND45 billion ($2.2 million). The insurance company is also looking to list on the HCM City Stock Exchange.
Market insiders said it would be easy for Vinacomin to step back from VNI with the only problem likely to come from the cost of divestment.
Vinacomin's deputy general director Nguyen Van Bien said the group had decided to retain its holdings worth VND59.4 billion ($2.9 million) in SHB Insurance Company and would withdraw capital from VNI to consolidate a principle investment in a single insurer.
Bien also revealed the group would divest all of its holdings in the Hai Ha Economic Investment and Development Joint Stock Company worth VND47.8 billion ($2.3 million), BIDV Expressway Development Joint Stock Company worth VND10.5 billion ($500,000), and Long Thanh International Airport Joint Stock Company worth VND7.5 billion ($360,000).
Analysts said Vinacomin's exit from the BIDV Expressway Development could be relatively easy as the company was working well, but its divestment from Hai Ha Company could be less smooth because it had been a long time since the company last held a board of directors' meeting.
The group has yet to decide what it will do with its stakes in Ha Tinh Port Company, the Viet Nam Mining and Energy Development Company, Dak Nong Wonlfram Comoany and Thach Khe Iron Company.
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