Investor's Deposit Requirement for Initial Share Purchase in the Equitization of State-Owned Enterprises
How much deposit must investors submit for the initial share purchase of a state enterprise transforming into a joint-stock company?
Based on Article 24 of Circular 21/2019/TT-BTC, the regulation regarding this issue is as follows:
Management of Deposits and Payments for Share Purchases
1. Investor's Deposit
a) Public investors are responsible for submitting a deposit equal to ten percent (10%) of the value of the shares to be purchased, calculated based on the book-opening price;
b) Strategic investors are responsible for submitting a deposit, making a margin, or having a guarantee from a credit institution or a foreign bank branch in accordance with the law, with a value equal to twenty percent (20%) of the value of the registered shares, calculated based on the starting price in the approved equitization plan as per point h, clause 3, Article 6 of Decree No. 126/2017/ND-CP.
The deposit for the initial share purchase of a state enterprise transforming into a joint-stock company is applied as follows:
+ For public investors: Submit a deposit equal to ten percent (10%) of the value of the shares to be purchased, calculated based on the book-opening price.
+ For strategic investors: Submit a deposit, make a margin, or have a guarantee from a credit institution or a foreign bank branch with a value equal to twenty percent (20%) of the value of the registered shares, calculated based on the starting price.
How much deposit must investors submit for the initial share purchase of a state enterprise transforming into a joint-stock company?
What is the specified payment period for the purchase of shares?
According to clause 2, Article 24 of Circular 21/2019/TT-BTC, the payment period for share purchases is regulated as follows:
Management of Deposits and Payments for Share Purchases
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2. Payment for Share Purchases
a) Within a period of ten (10) days from the date of announcing the book-building results, investors must complete the purchase of shares and transfer the money to the account designated for receiving share purchase payments as per the book-building method.
b) The deposit will be deducted from the total amount payable for the share purchase. In cases where the deposit exceeds the payable amount, the investor will be refunded the difference within three (03) working days from the end of the share purchase payment period.
c) If the investor fails to pay or does not pay the full amount required for the share purchase within the specified period, they will not be refunded the deposit amount corresponding to the unpaid shares or will be fined an equivalent amount of the deposit value in cases where a margin or guarantee is used. Unpaid shares will be considered unsold and will be handled according to regulations.
3. The purchase of shares must be paid in Vietnamese dong. Payments can be made either in cash or via bank transfer.
Thus, according to the above regulations, investors buying shares must make the payment within a period of ten (10) days from the date of announcing the book-building results and transfer the share purchase money to the designated account. Payments can be made either in cash or via bank transfer and must be in Vietnamese dong.
Additionally, the deposit will be deducted from the total amount payable for the shares. Investors will be refunded the difference within three (03) working days from the end of the share purchase payment period if the deposit exceeds the payable amount.
What is the specified period for transferring the proceeds from share sales of an equitized enterprise?
According to Article 25 of Circular 21/2019/TT-BTC (as amended and supplemented by clauses 2 and 3, Article 12 of Circular 57/2022/TT-BTC), the regulation regarding this issue is as follows:
- Within two (02) working days from the end of the share purchase payment period, the book-building agent is responsible for transferring the proceeds from the initial share sale to the Order Management Organization.
- Within five (05) working days from the end of the share purchase payment period, the Order Management Organization must transfer the proceeds from the share sale via the book-building method as follows:
+ Transfer proceeds from the share sale to the equitized enterprise:
++ For an equitized enterprise that is a state enterprise: transfer proceeds from the share sale corresponding to the funding for settling surplus labor and equitization costs as estimated in the equitization plan.
++ For an equitized enterprise that is wholly state-owned (100% charter capital): transfer proceeds from the share sale corresponding to the funding for settling surplus labor, equitization costs as estimated in the equitization plan, and tax obligations (if any).
+ Transfer the remaining proceeds from the share sale to the state budget (including any deposits not to be refunded to investors if applicable).
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