UPDATE 1-INTERVIEW-Qantas, Vietnam's Pacific deal seen by April

(Adds more comments, quotes and details, and INTERVIEW tag)

By Grant McCool and Ho Binh Minh

HANOI, March 19 (Reuters) - Qantas Airways Ltd. (QAN.AX) is expected to complete its deal to buy a stake in Vietnam's Pacific Airlines by April, an executive of the company that manages the state's stake in Pacific said on Monday.

"We have almost finalised the details and if everything goes smoothly, we could end up concluding the final agreement by the end of this month or early next month. Definitely within April," Le Song Lai, executive director of State Capital Investment Corporation (SCIC), told Reuters in an interview.

In January, Qantas Chief Financial Officer Peter Gregg said the carrier plans to invest a double-digit-million U.S. dollar sum in an Asian carrier and an official of unlisted Pacific said it was in talks with the Australian company.

Communist-run Vietnam limits foreign ownership in some listed companies to 49 percent and others such as banks and airlines at 30 percent. The carrier was valued at $167 million last year.

State-owned SCIC, a strategic investment arm of the government, was created in mid-2005 to take capital ownership of thousands of the country's state-run enterprises, which accounted for about 70 percent of the country's tax revenues.

COMMERCIAL BASIS

In the same interview on the sidelines of a two-day Vietnam Investment Forum in Hanoi, Lai said SCIC was working on a joint venture with Wall Street's Morgan Stanley (MS.N). Morgan Stanley announced the Hanoi-based venture earlier, in Hong Kong.

SCIC Morgan Stanley Securities would provide investment banking products such as M&A advice and capital markets underwriting, equity and debt sales, trading and research.

"We are happy that we could find a good partner like Morgan Stanley," Lai said in a hotel in central Hanoi. "We are working together to obtain the licences quite soon, hopefully by the end of the year."

He said SCIC had taken over up to 430 companies so far this year and planned to take over a further 700 by the year end. Since the formation of SCIC as part of Vietnam's economic reform process, 3,600 companies had been partly privatised, Lai said.

"SCIC is a state-owned company by ownership but we are working on a purely commercial basis and we are looking at profitability, it's our top priority," said Lai, 39, whose career spans time in the People's Army of Vietnam, an international law firm and the Ministry of Finance.

"We are a long-term investor open to any business opportunity that may be offered by domestic or foreign companies."

He said SCIC's portfolio averaged about a 12 percent return on equity.

"Our target will be 18 percent by 2007 or 2008 because we have a lot of companies to restructure."

He said the corporation planned to reduce state ownership in 50 companies this year.

In 2008 SCIC is expected to invest in infrastructure such as hospitals, sea ports and airports, Lai said without naming any specific project.

SCIC is one of 19 companies in Vietnam that are designated "of special importance" and report directly to Prime Minister Nguyen Tan Dung, 57, who is the youngest premier in the country's history and regarded as a leader in economic reform.

((Editing by Quentin Bryar; Reuters Messaging: grant.mccool.reuters.com@reuters.net; +84 4 825 9623)) Keywords: VIETNAM QANTAS/PACIFIC

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