Vietnamese dairy firm Vinamilk has decided to eliminate its 49% foreign ownership limit to facilitate overseas investment into the company which is valued at $7.85bn.
The company has not set a timeframe on when the current limit would be eliminated and shareholder voting is not required for the move, according to Vinamilk investor relations manager Tran Chi Son.
VinaCapital Group, which is a shareholder of Vinamilk, was notified about the decision on 16 May 2016.
Responding to the company's notification, VinaCapital chief investment officer Andy Ho said: "The opening of Vinamilk to full foreign ownership marks a huge milestone in the privatisation process.
"Vinamilk is the country's largest company by market capitalisation, is ranked as the most valuable brand in Vietnam, and continually delivers strong results.
"This is the first significant state-owned enterprise to completely remove foreign ownership limits, and we believe this could be the start of significant momentum in foreign ownership expansion and privatisation generally."
VinaCapital holds Vinamilk shares in two of its funds. In its Vietnam Opportunity Fund (VOF), Vinamilk accounts for 15% of NAV, worth around $112m as of 30 April 2016. Vinamilk is also held in the Forum One-VCG Partners Vietnam Fund (VVF) and accounts for 9.3% of NAV, or approximately $4.5m, as of 13 May 2016.
The decision to open up Vinamilk is significant in view of the planned divestment of the government's 45% stake, held by the State Capital Investment Corporation (SCIC) which is worth $3.5bn.
In 2015, Vinamilk's net income grew by 28% to 7.77 trillion dong (€306m) and its first-quarter net profit for 2016 increased by 38.5% from the same period in 2015.