MAJOR DIVESTMENT PLANS OUTLINED FOR SINGAPORE
The Singapore government should
reduce its stake in major state-owned or run companies like
Singapore Airlines Ltd <AIRH.SI> to around 30 pct over the next
decade and privatise statutory boards, a government report
said.
    The report of the Public Sector Divestment Committee also
recommended flotation of as many government-linked companies
(glcs) as possible, and secondary distribution of state-owned
shares to add breadth and depth to the Singapore stock market.
    The Singapore government owns or backs 608 companies under
three holding companies with total assets in access of 10
billion dlrs, the report said.
    The report said a study of 99 glcs showed that 41 of them
should be privatised, 52 should not be privatised, and six
should be studied further because they have foreign government
participation, serve a "social mission," or are defence-related.
    Of the 41, 15 should seek listing on The Stock Exchange of
Singapore Dealing and Automated Quotation System (SESDAQ),
including shipyards, printing firms and airport service firms.
    The government should privatise a further 17, including
Intraco Ltd (a government trading firm), Chemical Industries
(FE) Ltd, and Acma Electrical Industries Ltd, and reduce its
stake in nine, it added.
    These included Singapore Airlines, SIA, now 63 pct-owned by
the government's Temasek Holdings, The Development Bank of
Singapore <DBSM.SI>, Keppel Corp Ltd <KPLM.SI>, Sembawang
Shipyard Ltd <BAWH.SI> and Neptune Orient Lines Ltd.
    The ceiling on foreign ownership of SIA should be allowed
to rise to 49 pct from the current 20 pct, it said.
    "The committee recommends that Temasek Holdings reduces its
stake (in SIA) in tranches to around 30 pct. The size and
timing of each tranche would depend on the absorptive capacity
of the Singapore stock market," it added.
    Trading in shares of SIA, which has a paid-up capital of
619 mln dlrs, closed here today at 10.60 dlrs.
    The report said the government's 48 pct stake in DBS, one
of Singapore's four major local banks, should be cut to 30 pct
through public offerings or dilution by issuing new shares.
    Among firms which should not be privatised, nine are to be
wound up, it said, including storage and food trading firms.
    The report said seven statutory boards should be considered
for privatisation so as to reduce competition with the private
sector, with a 20 pct ceiling on foreign ownership.
    The seven include the Telecommunications Authority of
Singapore, the Public Utilities Board, the Port of Singapore
Authority, the Civil Aviation Authority of Singapore and the
Singapore Broadcasting Corp.
    The latter is least able to be privatised because of the
sensitivity of its activities, it said.
    "The others can be privatised only after various issues have
been thoroughly debated and adequate safeguards formulated for
post-privatisation control and regulation," it added.
    "The committee recommends that as many government-linked
companies as possible should be privatised," the report said.
    But it added that there should be "a policy of robust
privatisation where initiative is decentralised and order is
maintained through adequate monitoring, control and direction."
    The committee's findings will be subject to final approval
from the Ministry of Finance.
 REUTER
