No more investments in non-core areas
Mr. Duong Quang Thanh - Chairman of EVN’s Board of Members said that EVN had fulfilled its corporate restructure in 2012 - 2015 period under the Prime Minister's direction at Decision No. 1782/QD/TTg dated November 23, 2012. Accordingly, EVN has divested its entire stake from non-core businesses such as insurance, securities, banking, etc.
Currently, EVN holds only a 15% ownership stake in EVN Finance as permitted by the Government. However, EVN has submitted an application to the Ministry of Industry and Trade for withdrawal of its entire shares here. At present, there are no longer investments in non-core businesses.
It is known that EVN has approved a plan to divest itself from EVNFC and has proceeded to report to the State Securities Commission to prepare for auction of its entire stake on Hanoi Stock Exchange on August 18, 2017. It is expected that the divestment of its 15% stake in EVNFC will be completed in 2017.
In parallel with the divestment from non – core businesses, EVN has taken the initiative in rearranging and restructuring its affiliated companies. In the beginning of 2017, EVN finished transferring three colleges (Electrical Vocational College, Central Electric Power College, Ho Chi Minh City Electric Power College) to three regional Power Corporations.
Immediately after the Prime Minister issued the Decision approving Project "Restructuring State Owned Enterprises with a focus on economic groups and state owned corporations in the period 2016 - 2020", EVN’s Board of Members issued Resolution No. 157/NQ-HDTV on executing corporate restructure within Vietnam Electricity. At the same time, a report of list of enterprises for being rearranged and equitized during the period 2017 – 2020 has been submitted to the Prime Minister.
At the recent meeting between the Government and EVN, Mr. Nguyen Cao Luc – Vice Chairman of the Government Office said: "The Government appreciates EVN’s proactive, rapid and serious execution of corporate restructure. This reflects the sense of responsibility and willpower of EVN’s leaders. "
Restructuring EVN in line with the electricity market development roadmap
Acceleration of equitization
Mr. Duong Quang Thanh said that in execution of the Prime Minister’s direction and according to the Project on restructuring enterprises under EVN in the period 2017 - 2020, an action plan has been worked out, with the aim of equitizing Power Generation Corporation 3 (GENCO 3) in 2017 and Power Generation Corporation 1 and Power Generation Corporation 2 in 2018.
However, the equitization of Power Generation Corporations confronts many difficulties and challenges, due to vulnerable financial performance of these corporations. In order for GENCOs after being equitized to satisfactorily perform new power generation investment projects in accordance with the National Power Development Master Plan, EVN puts forward recommendation to the Prime Minister that a special restructure mechanism should be in place to allow the GENCOs to attain healthier financial status before being equitized. Accordingly, EVN should be entitled to request GENCOs to sell a part of or their entire stakes in power generation joint stock companies, ensuring that the debt to equity ratio does not exceed three times as prescribed. EVN and GENCOs should be allowed to raise their equity and chartered capital by the proceeds gained from selling stakes to their equity and chartered capital, or to use the proceeds as counterpart funds for investment and development of new projects assigned by the Government.
In the period of 2017 - 2020, EVN will continue to divest itself from businesses in finance, mechanics, power generation areas; the National Load Dispatch Center (A0) will be transformed into One Member Limited Liability Company, which will take charge of operating the power system and the electricity market as an independent accounting organization under EVN. EVN shall keep on holding 100% of the chartered capital in power transmission and distribution corporations, etc.
During this period, EVN directs corporations to separate accounting and bookkeeping doings between power system operation activities and power business activities, contributing to improvement of production and business efficiency of EVN.
In evaluation of EVN's restructure, Mr. Cao Sy Kiem, an economist, states that EVN is one of the leading groups who pioneer in divestiture from non – core businesses and restructuring corporate governance. After the rearrangement and renovation with focus on main business lines, EVN's activities have been recently recognized by the society and people, highly appreciated by the Government and leaders of ministries and agencies.
Despite the fact that a lot of difficulties and challenges persist, EVN is determined to perform the corporate restructure on the right track, aiming to become a strong economic group with advanced technology and management competency; playing a primary role in securing electricity supply to the socio-economic development and national energy security; developing rapidly, sustainably, competitively and integrating into the international economy.