Vietnam: Eligibility requirements for purchasing privately placed bonds from January 1, 2021

Vietnam: Eligibility requirements for purchasing privately placed bonds from January 1, 2021- Illustrative image.

Under Article 128 of the Law on Enterprises 2020, a joint stock company that is not a public company in Vietnam may sell bonds using private placement in accordance with this Law and relevant laws. To be specific:

- Private placement of bonds by public companies and other organizations, and public offering of bonds shall comply with securities laws.

- Private placement of bonds by a joint stock company that is not a public company in Vietnam means the offering of bonds without mass media to fewer than 100 investors, excluding professional securities investors, that satisfy the following conditions:

+ Strategic investors for privately placed convertible bonds and bonds attached to warrants;

+ Professional securities investors for privately placed convertible bonds, warrant-linked bonds and other kinds of privately placed bonds.

Under Clause 3, Article 128 of the Law on Enterprises 2020, a joint stock company that is not a public company must satisfy the following conditions to make a private placement of bonds:

- The company’s has fully paid the principal and interest of the bonds that are offered and due or fully paid due debts over the last 03 years before the offering (if any), except offering of bonds to creditors that are pre-selected finance organizations;

- The company has the audited financial statement of the year preceding the year of offering;

- The liquidity ratios and prudential ratios are maintained;

- Other conditions prescribed by relevant laws.

Further details may be found in Enterprise Law 2020 effective from January 1, 2021.

Le Vy

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