With more and more Mamp;A deals made recently, the education sector continues to be a field worth investing in.
The education sector is worth investing in
The investors in HCMC University of Economics & Finance (UEF) recently had to sell the school to a new owner – Hutech Education Investment and Development JSC – in a deal worth VND180 billion.
Five years ago, Phan Thiet University was sold to a group of investors at VND60 billion.
Prior to that, Thai Binh Duong University in Khanh Hoa province was sold to Asia Commercial Bank (ACB).
Education is a profitable business fields in the eyes of investors. Many corporations which do not have relations to education have also poured money into the sector.
Thanh Thanh Cong Group, a sugar producer and electricity generator, for example, took over Yersin University and Sonadezi Junior College.
Meanwhile, Thanh Tay University was transferred to Vicostone, specializing in stone work, and Hong Bang International University, Ba Ria-Vung Tau and Gia Dinh Universities are now under management of Nguyen Hoang Group.
Hung Hau Investment JSC, after owning Van Hien University, bought four more junior colleges (3-year training) and intermediate schools (2-year training).
Previously, investors just needed to have charter capital of VND250 billion to be eligible for establishing a private university.
Later, Decree 46 which took effect on April 21, 2017 stipulated that the minimum investment capital of private schools would be VND1 trillion and investors would have to satisfy other requirements.
The chair of the board of management of a private school in HCMC commented that with the new regulations, it would be better to buy existing schools rather than establishing new schools.
He said the number of private universities valued at VND1 trillion is very modest. The majority of schools changing hands recently only had charter capital of several hundred billion dong.
The buyer will be able to take full advantage of existing facilities and teaching staff, and will only have to spend money to upgrade the school and open more training majors.
At present, Vietnam has 65 privately run universities, amounting to 27.6 percent of total universities throughout the country, which train 244,000 students, or 13.8 percent of total students. The proportion is expected to rise to 40 percent by 2020.
The fate of schools varies after the transfer. Hung Vuong University in HCMC has been facing big problems since then – lecturers are leaving and there are only several hundreds of students. However, Hong Bang University has better facilities and teaching and learning conditions after its takeover by Nguyen Hoang Group.
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