Vietnam Debt and Asset Trading Corporation (DATC) is allowed to buy debts and assets in 3 forms

According to Article 14 of the Decree No. 129/2020/NĐ-CP of Vietnam’s Government, forms of buying and selling debts and assets of Vietnam Debt and Asset Trading Corporation (DATC) include:

1. Purchasing under the direction of the Government, the Prime Minister.

2. Directly dealing with creditors and property owners.

3. Participating in tenders, auctions to buy debts and assets.

The purchase of debts and assets shall be conducted according to the following principles:

** For activities of buying designated debts and assets:

The DATC is responsible for formulating a plan for debt purchase and asset purchase (including projects that need debt settlement support) to ensure compliance with the provisions of law and directive documents of the Government and the Prime Minister. DATC uses business capital or capital sources allocated by the State under decisions of the Government or Prime Minister to implement the plan to buy debts and buy assets as designated. In which:

- Debts and assets purchased by appointment are debts and assets of enterprises associated with the restructuring of enterprises under the direction of the Government or the Prime Minister in accordance with the prescribed competence;

- Designation contents include: debt and property buyers; purchase price of debt and property; measures to support financial handling and asset handling (if necessary);

- The agency representing the owner of the enterprise with debts and assets shall coordinate with the DATC and relevant agencies to report to the Government and the Prime Minister for consideration and decision on the appointment contents after consulting the Ministry of Finance.

Creditors, property owners and relevant organizations and individuals are responsible for coordinating with DATC to implement the developed plan.

** For activities of buying debts and assets for business:

- The plan to buy debts and assets must be effective, have a feasible plan to recover capital, preserve and develop capital. Debt and asset purchase price is determined by DATC on the principle of ensuring the profitability of the debt and asset purchase plan;

- Debts and assets purchased must have documents proving the creditor's rights and property's owner's rights;

- The purchase of debts and assets can only be done when there is an approved plan according to the prescribed authority hierarchy and can be done for each debt, asset or group of many different debts and assets of the same creditor or property owner or of many creditors or property owners;

- DATC may not use capital raised from organizations and individuals specified in Clause 2 Article 27 of Decree No. 129/2020/NĐ-CP to buy back debts of those organizations and individuals.

View more details at the Decree No. 129/2020/NĐ-CP of Vietnam’s Government, effective from December 10, 2020.

Thuy Tram

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