Is it correct for an enterprise with a charter capital of 10 billion VND to offer shares for the first time to the public in Vietnam?

Is it correct for an enterprise with a charter capital of 10 billion VND to offer shares for the first time to the public in Vietnam?

My company's charter capital is 10 billion VND and now we want to offer shares to public for the initial public offering, is that possible? Hope to be guided by you.

Reply:

Pursuant to Clause 1, Article 15 of the Securities Law 2019, requirements for public offering of joint stock companies include:

1. A joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly:

a) The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;

b) The company has profit over the last 02 years and has no accumulated loss on the offering date;

c) There is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;

d) At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is 1.000 billion VND or above, the ratio shall be 10%.

dd) Before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer’s charter capital for at least 01 year from the end of the offering;

e) The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes;

g) The offering is consulted by a securities company, unless the issuer is already a securities company;

h) The issuer has a commitment to have its shares listed or registered on the securities trading system after the end of the offering;

i) The issuer has an escrow account to receive payments for the offered shares.

Thus, according to the above regulations in Vietnam, an enterprise must have a contributed charter capital at time of registration for offering of VND 30 billion or more and must fully meet the above conditions to be eligible to offer shares for the first time to the public.

Therefore, in case your business has a charter capital of 10 billion VND, it is not eligible for an initial public offering in Vietnam (not considering other conditions).

What is face value of a publicly offered share in Vietnam?

I heard that there is a new regulation on the securities sector. Can I ask, according to this regulation, what is face value of a publicly offered share? Thank you!

Reply:

Pursuant to Article 13 of the Securities Law 2019, the par value of securities is as follows:

1. Face values of securities offered within Vietnam’s territory shall be expressed as VND.

2. The face value of a publicly offered share or fund certificate shall be 10 thousands VND. The face value of a publicly offered bond shall be a multiple of 100 thousands VND.

3. In case the securities price of an issuer on the securities trading system is lower than the face value, the issuer may offer the securities at that lower price.

Thus, based on the above provisions in Vietnam, the face value of a publicly offered share is VND 10,000.

What are conditions for a joint stock company's initial public offering in Vietnam?

I heard that the newly passed securities law has new regulations on initial public offerings of securities. May I ask what are conditions for a joint stock company's initial public offering in Vietnam? Thank you!

Reply:

Pursuant to Clause 1, Article 15 of the Securities Law 2019, conditions for a joint stock company's initial public offering include:

1. A joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly:

a) The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;

b) The company has profit over the last 02 years and has no accumulated loss on the offering date;

c) There is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;

d) At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is 1.000 billion VND or above, the ratio shall be 10%.

dd) Before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer’s charter capital for at least 01 year from the end of the offering;

e) The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes;

g) The offering is consulted by a securities company, unless the issuer is already a securities company;

h) The issuer has a commitment to have its shares listed or registered on the securities trading system after the end of the offering;

i) The issuer has an escrow account to receive payments for the offered shares.

We will respond to you with information.

Best regards!