VTV and SCIC plan to divest capital from the world’s highest tower project

The Ministry of Finance has recently sent a dispatch to the Government’s Office reporting on the Vietnam Television Tower project and the plan to recapitalize the investment capital of Vietnam Television Tower JSC.

In 2015, Vietnam Television (VTV) has cooperated with State Capital Investment Corporation (SCIC) to set up the Vietnam Television Tower JSC to invest in Vietnam Television Tower Project.

The company was granted an investment registration certificate on December 3, 2015, with chartered capital of VND 600 billion.

VTV has allowed to choose its partners as a private equity to contribute capital to the company. The capital contribution of VTV in the company will be mobilized capital, equitisation capital of VTV’s enterprises, and capital contribution of SCIC will be business capital. When the project brings in effectiveness, VTV and SCIC are allowed to sell shares to recover capital. Private enterprises selected by VTV to participate in the project are BRG Group.

As plan announced in early 2016, Vietnam Television Tower is expected to be 636 m high, to be the highest television tower in the world, surpassing the current highest TV tower of Sky Tree in Tokyo, Japan (634 m).

The project’s construction site is in the West of West Lake urban area (Hanoi), with a total investment of 1.3-1.5 billion USD, tower block alone is 900 million.

The project includes a lot of portfolios including tourism, culture, entertainment and real estate with a total area of 14 hectares. Construction period is about 6 years, to be completed in 2021 and put into use. The payback period is 15 years.

However, according to information from the Ministry of Finance, recent moves have shown that VTV and SCIC have difficulty with this project. In the written document submitted to the Government, VTV said that VTV must prioritize the investment for producing program and develop business in the field of television and proposed to divest all or most of capital at company.

According to the report of VTV, so far three units contributed capital to Vietnam Television Tower JSC have contributed 150 billion already. Therefore, enterprises must adjust the charter capital according to provisions of law.

On the other hand, according to VTV’s report, the project has not yet been approved by the Prime Minister.

Meanwhile, SCIC also wants to put Vietnam Television Tower Corporation on the list of 100% divestment, because the project is not included in the existing list that the State should dominate or invest in the orientation to develop SCIC.

The Ministry of Finance proposed the Government’s Office to request the  investors to report to the Prime Minister on the necessity to implement the project, the project’s  objectives and the implementation capacity of the investors.

“The case of VTV and SCIC not participate in the project means that the State does not invest capital in the project,” stated the report .

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According to the Ministry of Finance, for the proposal on divestment of VTV and SCIC, the Ministry of Finance requested the company to organize a shareholders’ meeting to re-determine the necessity, objectives of the project and report to the Prime Minister for consideration the decision-making.

In cases VTV and SCIC divest their capital at the approval of competent authorities, the capital divestment shall comply with the provisions of the Law on the Management, use state capital to invest in production and business at enterprises and the Enterprise Law.

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