The things MobiFone can inherit from the Vietnam Post and Telecommunication Group (VNPT) include the two Vinasat satellites which have caused the loss of trillions of dong, and a finance company with the loss bigger than the stockholder equity.
VNPT has finally decided to retain VinaPhone, one of the two biggest mobile phone networks, and let MobiFone leave. Under a report submitted to the government recently, MobiFone would become a corporation to be independent from VNPT and would be put under the management of the Ministry of Information and Communication (MIC).
Under the current laws, an institution or individual who owns more than 20 percent of the chartered capital of one enterprise, must not own more than 20 percent of stakes of another telecom institution which does business on the same market.
This means that VNPT, which now possesses two telcos, MobiFone and VinaPhone, has to choose either to retain MobiFone or VinaPhone.
Once becoming a corporation put under the direct management of MIC, MobiFone is believed to have best conditions to develop strongly.
However, MobiFone would not leave alone. It would leave with heavy burden on its shoulders.
A government inspectors’ report released in July 2013 showed that the Vinasat 1 project, which had the total investment capital of VND3.854 trillion, not including VAT, had incurred the loss of VND1.589 trillion, which was VND329 billion higher than planned.
The Vinasat 2 project has the bigger investment capital, at VND5.426 trillion. According to the government inspectors, VNPT would incur the loss of $62-130 million in the best scenario, if the satellite can be exploited well. In a worse scenario, the loss could be up to $216 million.
The figures may give everyone a shock. Prior to that, when discussing the projects’ effectiveness, the investor only planned good business results.
Analysts have warned that the loss cannot be settled overnight, and that the incurring of the loss would certainly affect MobiFone’s business performance when it operates as an independent corporation.
And this is not the only debt MobiFone would have to bear. VNPT has decided that the Post and Telecommunication Finance Company (PTF) would be a subsidiary of MobiFone. The company has the initial chartered capital of VND500 billion, while it had incurred the loss of VND635 billion by the end of 2012, which means the minus stockholder equity of VND127.5 billion, and VNPT has failed with the project.
Under the VNPT restructuring plan submitted to the Prime Minister, a series of projects invested by VNPT would be transferred to MobiFone. These include the unprofitable businesses whose stake prices have decreased sharply on the stock market.
VNPT itself once met difficulties when trying to withdraw capital from some businesses, including TST, a telecom technique service firm, and SPT.
If unprofitable projects are transferred to MobiFone as VNPT wants, VNPT would only have to think of withdrawing capital from Maritime Bank.
VNPT is the biggest shareholder in Hacisco, a construction and installation company, holding 28 percent of stakes. As Hacisco’s share price has dropped to VND4,700 per share, or just equal of the nominal value, its investment value has decreased dramatically.
Viteco, where VNPT is the biggest shareholder with 49 percent of stakes, has been taking loss. In the first nine months of the year, it incurred the loss of VND5.2 billion, a sharp increase if compared with the last year’s loss of VND800 million.