The board of Vietnamese dairy firm Vinamilk has decided to remove its 49 percent foreign ownership cap, Reuters says.
Vinamilk, or Vietnam Dairy Products JSC, has long been the country’s most sought after firm among foreign investors due to its strong prospects and expansion plans. Vinamilk’s share value has grown 18 times since it first listed in 2006 to 146,000 dong ($6.54) as of Monday’s close.
Foreign investors have been frustrated by Vietnam’s lack of progress toward liberalizing equities following a surprise announcement last year that it would dismantle foreign ownership limits in many sectors, one of the communist country’s boldest economic reforms yet.
Vietnam’s government will divest all of its shares in Vinamilk, one of the country’s most sought-after equities, state media reported on Tuesday, in a rare sign of openness by the state towards relinquishing controls on major firms, Reuters says.
Vinamilk, or Vietnam Dairy Products JSC, the top listed company by market value, is 45 percent owned by the government, with the largest other shareholder F&N Dairy Investment, a unit of conglomerate Fraser and Neave, with 9.54 percent.
Vinamilk dominates the local market and its value has climbed 10 times over the past decade, from $500 million in 2006 to around $5.47 billion now, making it a rare success story in a state sector plagued by bad debt, inefficiency and low profitability.