State-owned enterprises (SOEs) will have to divest some VND19.52 trillion (US$898 million) worth of public capital from now until the end of this year, the Vietnamese Ministry of Finance insisted at a meeting in Hanoi on Friday.

Of the amount, VND12 trillion ($552 million) worth of state capital buried in banking and real estate needs to be recovered, Dang Quyet Tien, deputy director of the Department of Corporate Finance under the ministry, said at a press conference after the meeting.

This is not a small amount of capital that SOEs have invested in risky non-core areas such as real estate, securities, banking, and insurance, Tien said.

The government requires SOEs to divest from non-core fields to focus on their core business, he added.

The divestment is part of a bigger restructuring of SOEs that was initiated by the government in 2011 in an effort to scale down the number of state firms and elevate their efficiency.

According to a government plan, 432 SOEs will undergo equitization by the end of 2015.

Vuong Dinh Hue, chief of the Central Economic Committee, said that SOEs currently use 70 percent of land banks, 70 percent of the official development assistance Vietnam has borrowed from its donors, and 60 percent of the total credit of the economy but they contribute only 32 percent of the country’s GDP.

By the end of the first quarter, about 7,000 SOEs have drawn up their equitization plans, of which more than 4,200 have undergone the equitization process, Tien said.

In 2011-13, 180 SOEs underwent a restructuring, of which 99 were equitized, he said.

During the 2014-15 period, Vietnam plans to finish equitizing some 432 SOEs, of which 167 were restructured in 2014.

As of the first quarter, some VND8.2 trillion ($377 million) worth of state capital was divested, and about VND8.6 trillion ($395.6 million) was recovered for the state budget, Tien added.

According a National Assembly report on the country’s SOE restructuring scheme, as of March 24, 289 SOEs to be equitized in 2015 have established a steering committee, of which 29 enterprises were already equitized.

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