Which cases are not required to conduct securities offering in Vietnam?

1. Which cases are not required to conduct securities offering in Vietnam?

In Clause 2, Article 35 of the Law on Securities 2019 stipulates tender offer, specifically as follows:

2. Tender offer is not mandatory to the entities mentioned in Clause 1 of this Article in the following cases:

a) The purchase of shares or closed-end fund certificates results in the holdings specified in Clause 1 of this Article under an issuance plan approved by the General Meeting of Shareholders of the public company or the representative board of the closed-end fund;

b) The acquisition of voting shares or outstanding closed-end fund certificates results in the holdings specified in Clause 1 of this Article as approved by the General Meeting of Shareholders of the public company or the representative board of the closed-end fund,  in which cases the General Meeting of Shareholders or representative board of the closed-end fund shall identify the transferors and transferees;

c) The transfer of shares between groups of companies, including business corporations, general companies, parent companies, subsidiaries does not result in cross ownership defined by the Law on Enterprises;

d) Shares are acquired through auction of publicly offered securities or offering upon transfer of state capital or a state-owned enterprise’s stakes in another enterprise;

dd) Shares are acquired through division, acquisition or consolidation of enterprises;

e) Giveaway, inheritance of shares or closed-end fund certificates;

g) Transfer of shares or closed-end fund certificates under an effective  court judgment, court decision or arbitral decision.

2. What are conditions for the initial public offering of shares of a joint stock company in Vietnam?

Pursuant to Clause 1, Article 15 of the Securities Law 2019, a joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly include:

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.

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